Lesson 8 key tems - Lesson 8 key tems Aggregate demand(AD consists of Consumption and Investment in Classical Theory but also including government

Lesson 8 key tems - Lesson 8 key tems Aggregate...

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Lesson 8 key tems Aggregate demand (AD) consists of Consumption and Investment in Classical Theory but also including government and export expenditures in Keynesian Theory compared to prices at each level Aggregate Supply (AS) is the amount of output provided by all suppliers at varied price levels Average Propensity to Consume (APC) The average amount of income spent of total income = consumption/income Average Propensity to Save (APS) The average amount of income saved of total income = savings/income Balanced Budget Multiplier The amount of magnification caused by an increase in government spending (G) and taxation (T) when applied at the same time. G has a greater impact because it does not have to be process through personal spending. G impact = G times the multiplier while T impact = T times multiplier times MPC Countercyclical Government Policy Discretionary or non-discretionary fiscal policy that helps to stimulate the

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