Chapter 9 Flashcards
Aggregate output
The total amount of goods and services produced in an economy
Aggregate expenditure
The total expenditure on the economy’s output of goods and services
Closed economy
An economy that does not engage in foreign trade
Autonomous investment
Investment that does not vary with income
Keynesian expenditure model
A macroeconomic model that emphasizes aggregate expenditure, with the assumptions of a constant price level and unemployed resources
Ex ante
Before the fact; planned or intended
Ex post
After the fact; actual or realized
Consumption schedule
A table showing the relationship between total consumption and total income
Average propensity to consume
The fraction of total income that goes into consumption
Average propensity to save
The fraction of total income that is saved
Marginal propensity to consume
The fraction of extra income allocated to consumption
Marginal propensity to save
The fraction of extra income allocated to saving
Break-even level of income
The level of income at which consumption equals income or saving is zero
Autonomous consumption
Consumption that does not depend on income
Dissaving
A situation in which current consumption exceeds current income, so that saving is negative
