________ to save- The fraction of any change in income saved.
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Movement
________ b /w points on consumption schedule= Change in amount consumed.
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Household expectations
________ about future prices and income may affect current spending and saving.
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Multiplier
________- Ratio of a change in GDP to the initial change in spending.
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Average propensity
________ to save- The fraction of total income that is saved.
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schedule
Saving ________- There is a direct relationship between saving and DI but that saving is a smaller proportion of a small DI than of a large DI.
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disposable income
45 degree line- Reference line; the vertical distance between the 45 line and any point on the horizontal axis measures either consumption or ________.
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Wealth effect
________- Events sometimes suddenly boost the value of existing wealth.
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current consumption
When a household borrows, it can increase ________ beyond what would be possible if its spending were limited to its disposable income.
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Marginal propensity
________ to consume- The proportion, or fraction, of any change in income consumed.
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Disposable income
________ determines levels of consumption + saving.
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Average propensity
________ to consume- The fraction, or percentage, of total income that is consumed.
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Multiplier
________= 1 /Marginal Propensity to Spend.
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45 degree line
Reference line; the vertical distance between the 45 line and any point on the horizontal axis measures either consumption or disposable income
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Consumption schedule
Schedule showing the various amounts that households would plan to consume at each of the various levels of disposable income that might prevail at some specific time
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Saving schedule
There is a direct relationship between saving and DI but that saving is a smaller proportion of a small DI than of a large DI
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Break-even income
Income level at which households plan to consume their entire incomes
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Average propensity to consume
The fraction, or percentage, of total income that is consumed
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Average propensity to save
The fraction of total income that is saved
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20
Marginal propensity to consume
The proportion, or fraction, of any change in income consumed
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21
Marginal propensity to save
The fraction of any change in income saved
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Wealth effect
Events sometimes suddenly boost the value of existing wealth
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Expected rate of return
Anticipated revenue that will be generated
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Investment demand curve
Shows the amount of investment forthcoming at each real interest rate
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Multiplier
Ratio of a change in GDP to the initial change in spending
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45 degree line
Reference line; the vertical distance between the 45 line and any point on the horizontal axis measures either consumption or disposable income
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27
Consumption schedule
Schedule showing the various amounts that households would plan to consume at each of the various levels of disposable income that might prevail at some specific time
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28
Saving schedule
There is a direct relationship between saving and DI but that saving is a smaller proportion of a small DI than of a large DI. If households consume a smaller and smaller proportion of DI as DI increases, then they must be saving a larger and larger proportion.
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Break-even income
Income level at which households plan to consume their entire incomes
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Average propensity to consume
The fraction, or percentage, of total income that is consumed
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Average propensity to save
The fraction of total income that is saved
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32
Marginal propensity to consume
The proportion, or fraction, of any change in income consumed
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33
Marginal propensity to save
The fraction of any change in income saved
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34
Wealth effect
Events sometimes suddenly boost the value of existing wealth. When this happens, households tend to increase their spending and reduce their saving.
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Expected rate of return
Anticipated revenue that will be generated
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Investment demand curve
Shows the amount of investment forthcoming at each real interest rate
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Multiplier
Ratio of a change in GDP to the initial change in spending
Studied by 3 people
