Quiz Revision Flashcards
What is Chun’s Law?
The relation between GDP growth and the change in unemployment rate
What is autonomous spending?
The level of spending that occurs independently of current income levels
Explain the consumer price index
A measure that examines the average change in prices paid by consumers for goods and services over time
What is ‘monetary contraction’?
A change in monetary policy which leads to an increase in the interest rate.
Define the ‘marginal propensity to save’
It is the proportion of an addition rand of income that a household saves RATHER THAN spends
What is “real interest rate”?
Interest rate in terms of goods one will repay in future for borrowing the equivalent one good today
What is the paradox of saving?
Refers to the effects of an increased desire to save an output and on the final level of saving
What is the term for:
The amount of money that individuals have available for spending and saving after taxes have been deducted from their gross income
Disposable income
What are savings?
The part of after-tax income that one does not spend; it is a flow variable
