econ 102 review session...

econ 102 review session... - Marginal Propensity to Consume...

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Marginal Propensity to Consume (MPC): the fraction of a 1 dollar change in income that goes to consumption. Marginal Propensity to Save (MPC): the fraction of a 1 dollar change in income that goes to saving. Macro Equilibrium: what is produced equals what is purchased Multiplier: shows the effect of a change in spending on equilibrium output. Lump Sum Tax: collects the same revenue at all income levels Marginal Tax: where the proportional tax varies at different income levels Proportional Tax: collects the same proportion of income as tax revenue Fiscal Policy: Govn control of taxing and spending Contractionary Policy: designed to cause Y (output) to decrease Expansionary Policy: designed to cause income to increase Inflationary Gap: diff between current and full employment output when current output is above full employment output Recessionary Gap Exchange Rate: dollar price of foreign currency or the foreign currency price of dollars for 1 period Aggregate Demand Curve: various equilibrium levels of spending that occur
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econ 102 review session... - Marginal Propensity to Consume...

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