CLEP Macro Economics

O aggregated demand the total expenditure in an

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o Aggregated demand: The total expenditure in an economy, making up the gross domestic product; it includes consumer spending, government spending, investments, and exports minus imports. o Auction markets: Markets in which price rises in response to increased demand, as long as the supply curve is upward sloping. o Autonomous expenditures: Spending from any entity (households, businesses, government, net foreign) not immediately related to domestic income levels. This includes investment, government expenditures on real goods and services, and net exports in addition to household consumption. o Average propensity to consume (APC): The percentage of disposable income that households plan to spend on goods and services; consumption divided by disposable income. o Average propensity to save (APS): The percentage of disposable income that households save as opposed to expending; saving divided by disposable income. B o Bank: An institution with the role of accepting deposits for and lending money to individuals and businesses. o Base period: The time frame used for comparing price level changes in specific goods and services. o Bonds: A type of financial agreement in which the bearer promises to pay a certain amount of money plus interest in the future. o Borrowers: Business investors or individual consumers who get money now in return for their promise to pay it along with the interest later. o Budget deficit: An excess of government spending over and above government revenues in a particular year. o Budget surplus: An excess of government revenues over and above government spending in a particular year. o Bureau of Economic Analysis (BEA): A part of the United States Commerce Department that compiles the National Income and Product Accounts (NIPA). o Bureau of Labor Statistics (BLS): The government agency which is responsible for constructing the consumer price index (CPI) to gauge inflation rates. o Business cycle: Alternating ups and downs, increases and declines, in economic activity levels occurring around growth trends. C o Capacity utilization rate: The production output of a company or an entire economy, expressed as a percentage, arrived at by dividing actual output by the total possible output. o Capital: Human-made products used for the production of other goods. o Capital budget: A schedule of expenditures for use on resources used in the production of final goods and services. o Capital consumption allowance: Depreciation value used in calculating the national domestic product statistic; it is also called consumption of fixed capital. o Central bank: A financial institution that conducts monetary policy and acts as a financial advisor to the government. o
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o Aggregated demand The total expenditure in an economy...

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