Econ 201 Lecture 14: Output and Expenditure in the Short Run

These flashcards cover key vocabulary terms and concepts from the Econ 201 Lecture 14 on Output and Expenditure in the Short Run.

Marginal Propensity to Consume (MPC)

The increase in consumer spending caused by an increase in disposable income.

Marginal Propensity to Save (MPS)

The increase in saving caused by an increase in disposable income.

Aggregate Expenditure

The total spending in an economy at a given level of income.

Investment

Spending on capital goods that will be used to produce goods and services in the future.

Real GDP

The inflation-adjusted value of all goods and services produced in a country in a given year.

Net Exports (NX)

The value of a country's total exports minus the value of its total imports.

Multiplier Effect

The process by which an initial change in spending leads to a larger overall change in economic activity.

Autonomous Expenditure

Spending that occurs regardless of the current level of income. Could be I, G, NX

Unplanned Inventories

Stock that is left unsold due to lower demand than expected.

Aggregate Demand Curve

A graph showing the relationship between the overall price level and the total quantity of goods and services demanded in the economy.