AP MAC unit #3
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show | The fraction,or percentage, of total income that is consumed.
APC=consumption/income
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show | The fraction of total income that is saved.
APS=saving/income
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MPC-marginal propensity to consume | show 🗑
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MPS-marginal propensity to save | show 🗑
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Multiplier Effect | show 🗑
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Inflationary Gap | show 🗑
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show | A schedule or curve that shows the amount of real output that buyers collectively desire to purchase at each possible price level.
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show | 1.change in consumer spending
2.change in invesment spending
3.change in government spending
4.change in net export spending
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show | A schedule or curve showing the level of real domestic output that firms will produce at each price level.
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Determinants of AS | show 🗑
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Expansionary Fiscal Policy | show 🗑
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show | Uses decreases in government spending or increases in taxes to reduce demand-pull inflation.
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show | An expansionary fiscal policy may increase the intrest rate and reduce private spending ,thereby weakining or canceling hte stimulus of the expansionary policy.
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