The total demand for goods and services in an economy.
The total supply of goods and services in an economy.
When government spending induces private investment.
When government spending reduces private investment.
A schedule that relates price to quantity demanded.
Income that may be spent after taxes are subtracted.
A change resulting from conditions outside of an economic model.
Gross domestic product is the total value of all goods and services produced
within an economy.
Money taken in by a system, an individual, a firm, or an economy.
The year-to-year increase in the price level.
Marginal Propensity to Consume
A number that describes the amount of an additional dollar of income that a
consumer will spend rather than save.
The total amount of currency and demand deposits that exists in an economy.
The total amount of money earned in an economy in a year. C.f. GDP.
The difference between exports and imports.
Nominal Interest Rate
The cost of borrowing money, unadjusted for inflation.
The value of something in current currency, unadjusted for inflation.
The amount of goods and services produced in an economy. This can be
in quantity or in currency.
The overall level of prices within an economy.
Real Exchange Rate
The rate that goods and services of one country can be traded for goods and
services of another country.
Real Interest Rate
The cost of borrowing money, adjusted for inflation.
The value of something in constant currency, adjusted for inflation.
Formula for Output or income
Y = C(Y - T) + I(r) + G + NX(e) = basic equation for aggregate demand = IS curve
LM curve equation
M/P = L(r,Y)