MMACRO 2ND SEM FINAL EXAM

is a determinant of consumption and savings.

is part of income spent on goods and services yielding direct satisfaction. It occupies the biggest chunk of the expenditure on output.

is part of the disposable income that is not consumed.

 

o    The rate of change of the general price level

A measure of the number of people looking for work, but who are without jobs.

o    Real gross national product (GNP) measures total income of an economy. It is closely related to the economy’s total output.

it shows the relationship between the levels of consumptionexpenditures and the level of disposable income.

The 45° line tells whether consumer spending is equal to, greater than, or less than the level of disposable income.

shows the relationship between the level of savings and income. It is the vertical distance between the 45° line and the consumption function.

 is the extra amount that people consume when they receive an extra income.