CLEP Macro Economics

O multiplier effect a macroeconomic component in the

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o Multiplier effect: A macroeconomic component in the aggregate expenditure model focusing on the way changes in expenditures are magnified in their influence on equilibrium GDP. o Multiplier model: A macroeconomic component involved in the aggregate expenditure model that focuses on the way changes in aggregate expenditures or aggregated demand magnify their influence on equilibrium GDP. N o National debt: A country's accumulated deficit minus any accumulated surpluses over time. o National income: A nation's total income earned by the factors of production-individuals and businesses. o National income accounting: A set of rules and definitions for measuring economic activity, such as national income, in the entire economy of a nation. o Natural rate of unemployment: A statistic stated as a percentage that represents the lowest level of unemployment possible that will not cause rising inflation; the unemployment rate at which actual inflation equals expected inflation. o Net domestic product (NDP): A figure arrived at by subtracting the capital consumption allowance (for example, using standard rules of depreciation) from the gross domestic product (GDP); this is the amount of money available for consumption spending or for addition to a country's capital coffers. o Net exports: Exports minus imports; money spent on goods imported from other countries do not contribute to the gross domestic product for a country. o Net foreign factor income: Income from foreign domestic factor sources minus foreign factor income earned domestically. o Net private investment: Gross private investment minus depreciation.
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o Net taxes: Taxes collected by the government minus any government transfer payments to households and businesses. o New Growth Theory: A perspective in economics that highlights the importance of ideas and technology in explaining economic progress. o Nominal GDP: A statistic measuring gross domestic product at existing prices. o Nominal deficit: This is the budget shortfall determined by looking at the difference between expenditures and receipts. o Nominal income: The amount of money earned during a specific period of time as measured in the number of dollars received. o Nominal surplus: This is the budget excess determined by looking at the difference between expenditures and receipts. o Nonaccelerating inflation rate of unemployment (NAIRU): An alternative term for the target rate of unemployment; a statistic representing an attainable level of joblessness without causing prices to increase. o Nondurable goods: Products with a short lifespan, which means they are expected to need replacement within three years. O o Okun's Law: A 1% change in the unemployment rate will result in a 2% change in the GDP in the opposite direction. Also called Okun's Rule of Thumb. o
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o Multiplier effect A macroeconomic component in the...

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