Term
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Definition
the relationship in the economy between consumption and income, other things constant |
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Term
marginal propensity to consume (MPC) |
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Definition
the fraction of a change in income that is spent on consumption; the change in consumption divided by the change in income that caused it |
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Term
marginal propensity to save (MPS) |
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Definition
the fraction of a change in income that is save; the change in saving divided by the change in income that caused it |
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Term
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Definition
the relationship between saving and income, other things constant |
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Term
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Definition
the value of all assets minus liabilities |
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Term
life-cycle model of consumption and saving |
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Definition
young people borrow, middle-agers pay of debts and save, and older people draw down their savings; on average, net savings over a lifetime is usually little or nothing |
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Term
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Definition
the relationship between the amount businesses plan to invest and the economy's income, other things constant |
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Term
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Definition
a term that means "independent"; for example, autonomous investment is independent of income |
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Term
government purchase function |
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Definition
the relationship between government purchases and the economy's income, other things constant |
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Term
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Definition
the relationship between net exports and the economy's income, other things constant |
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