Chapter 27: Basic Macroeconomic Relationships

________ to save- The fraction of any change in income saved.

________ b /w points on consumption schedule= Change in amount consumed.

________ about future prices and income may affect current spending and saving.

________- Ratio of a change in GDP to the initial change in spending.

________ to save- The fraction of total income that is saved.

Saving ________- There is a direct relationship between saving and DI but that saving is a smaller proportion of a small DI than of a large DI.

45 degree line- Reference line; the vertical distance between the 45 line and any point on the horizontal axis measures either consumption or ________.

________- Events sometimes suddenly boost the value of existing wealth.

When a household borrows, it can increase ________ beyond what would be possible if its spending were limited to its disposable income.

________ to consume- The proportion, or fraction, of any change in income consumed.

________ determines levels of consumption + saving.

________ to consume- The fraction, or percentage, of total income that is consumed.

________= 1 /Marginal Propensity to Spend.

Reference line; the vertical distance between the 45 line and any point on the horizontal axis measures either consumption or disposable income

Schedule showing the various amounts that households would plan to consume at each of the various levels of disposable income that might prevail at some specific time

There is a direct relationship between saving and DI but that saving is a smaller proportion of a small DI than of a large DI

Income level at which households plan to consume their entire incomes

The fraction, or percentage, of total income that is consumed

The fraction of total income that is saved

The proportion, or fraction, of any change in income consumed

The fraction of any change in income saved

Events sometimes suddenly boost the value of existing wealth

Anticipated revenue that will be generated

Shows the amount of investment forthcoming at each real interest rate

Ratio of a change in GDP to the initial change in spending

Reference line; the vertical distance between the 45 line and any point on the horizontal axis measures either consumption or disposable income

Schedule showing the various amounts that households would plan to consume at each of the various levels of disposable income that might prevail at some specific time

There is a direct relationship between saving and DI but that saving is a smaller proportion of a small DI than of a large DI. If households consume a smaller and smaller proportion of DI as DI increases, then they must be saving a larger and larger proportion.

Income level at which households plan to consume their entire incomes

The fraction, or percentage, of total income that is consumed

The fraction of total income that is saved

The proportion, or fraction, of any change in income consumed

The fraction of any change in income saved

Events sometimes suddenly boost the value of existing wealth. When this happens, households tend to increase their spending and reduce their saving.

Anticipated revenue that will be generated

Shows the amount of investment forthcoming at each real interest rate

Ratio of a change in GDP to the initial change in spending