Unit 3 Review
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11 Terms
1
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Autonomous Expenditure
Money spent on things regardless of how much income you generate (fixed costs)
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MPS
Marginal Propensity to Save
3
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MPC
Marginal Propensity to Consume
4
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Yd
Disposable Income
5
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Equation for Yd
Gross income - Income Tax
6
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Equation for MPC
Change in Consumption / Change in Yd
7
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Equation for MPS
Change in Savings / Change in Yd
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The Expenditure Multiplier
Maximum effect a change in autonomous expenditure has on aggregate demand
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Equation for Expenditure Multiplier
1 / MPS
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Equation for Tax Multiplier
\- MPC / MPS
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Equation for Transfer Multiplier
MPC / MPS
Note 
Flashcards (52)