Chapter 1 Macro Key Definitions - Turbo

Income _____________________: The transfer of income from rich to poor to ensure greater access to necessities

Inflation: A sustained rise in the ___________ _________ ________

Injections: Additions of extra spending into the circular flow of income in the form of... (tick all that apply)

• Consumer expenditure

• Investment

• Government spending

• Export revenue

• Import expenditure

Investment: Business and government spending on ___________ goods

• Capital

• Inferior

• Price elastic

• Consumer

__________________ School: A group of economists who believe that the macroeconomy can settle at an equilibrium that is below full employment

Withdrawals of possible spending from the circular flow of income in the form of.... (tick all that apply)

• Import expenditure

• Export revenue

• Consumer expenditure

• Savings

• Taxation

________________ _________________: A situation where aggregate demand equals aggregate supply and real GDP is not changing

Marginal propensity to consume: The proportion of an ____________ ___ ________________ ________________ that households devote to consumer expenditure

Marginal ____________ ___ ________________: The proportion of an increase in disposable income that households spend on imported goods and services

Marginal propensity to save: The _______________ ___ ___ ________________ in disposable income that households devote to saving