Term
| 4Components of Aggregate Expenditure |
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Definition
Consumption
Planned Investment
Government
NX (Exports-Imports) |
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Term
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Definition
relationship between income and consumption
45 degree line |
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Term
| What does the Slope stand for AE |
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Definition
| Marginal Propensity to consume |
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Term
| What does the Y intercept point stand for AE |
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Definition
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Term
| What can Cause AE to shift up |
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Definition
Wealth increase (+)
Interest Rate Decrease (-)
Expectations of Future Income (+)
Price level decrease (-)
tax decrease (-) |
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Term
| What does a movement along the line represent |
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Definition
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Term
Investment spending is planned business expenditures.
what are the determinants? |
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Definition
Expectations of future profit (+)
Interest rate (-)
taxes (-)
cash flow (+) |
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Term
| What is excluded from government purchases |
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Definition
| excludes transfer payments |
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Term
| What causes net export to shift (import-export) |
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Definition
Price level in US relative to other countries (-)
Growth rate of GDP in us relative to other countries (-)
Us currency relative to other currencies (+) |
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Term
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Definition
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