Macroeconomics McGraw Hill chapter 11

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Planned investment
the amount that firms plan to invest
Investment schedule
a curve or schedule that shows the amount firms plan to invest at various possible values of real gross domestic product
Aggregate expenditures schedule
a curve or schedule showing the total amount spent for final goods and services at different levels of real GDP
Equilibrium GDP
the GDP at which the total quantity of final goods and services purchased (aggregate expenditures) is equal to the total quantity of final goods and services produced (the real domestic output); the real domestic output at which the aggregate demand curve intersects the aggregate supply curve; GDP = C + Ig
Leakage
a withdrawal of the of potential spending from the income expenditures stream via savings, tax payments, or imports
Injection
an addition of spending to the income expenditures stream: investment, gov purchases, and net exports
Unplanned changes in inventory
changes in inventories that firms did not anticipate; changes in inventories that occur because of unexpected increases/decreases of aggregate spending (or of aggregate expenditures)
Lump-sum tax
a tax that collects a constant amount (that tax revenue of gov is the same) at all levels of GDP
Recessionary expenditures gap
the amount by which the aggregate expenditures schedule must shift upward to increase the real GDP to its full employment, noninflationary level
Inflationary expenditures gap
the amount by which the aggregate expenditures schedule must shift downward to decrease the nominal GDP to its full-employment noninflationary level
Categories: Macroeconomics