AP Macroecon Chapter 9&10 Vocabulary

McConnell Brue book 16th edition (all terms are from glossary)

229924741	45 Degree Line	a reference line where each point on the line is when consumption equals disposable income
229924742	Consumption Schedule	a schedule showing the amounts households plan to spend for consumer goods at different levels of disposable income.
229924743	Saving Schedule	a schedule that shows the amounts households plan to save (plan not to spend for consumer goods), at different levels of disposable income.
229924744	Break-Even Income	the level of disposable income at which households plan to consume (spend) all their income and to save none of it; also, in an income transfer program, the level of earned income at which subsidy payments become zero.
229924745	Average Propensity to Consume (APC)	fraction (or percentage) of disposable income that households plan to spend for consumer goods and service; consumption divided by disposable income.
229924746	Average Propensity to Save (APS)	fraction (or percentage) of disposable income that households save; saving divided by disposable income.
229924747	Marginal Propensity to Consume (MPC)	The fraction of any change in disposable income spend for consumer goods; equal to the change in consumption divided by the change in disposable income.
229924748	Marginal Propensity to Save (MPS)	the fraction of any change in disposable income that households save; equal to the change in saving divided by the change in disposable income.
229924749	Wealth Effect	the tendency for people to increase their consumption spending when the value of their financial and real assets rises and to decrease their consumption spending when the value of those assets fall.
229924750	Expected Rate of Return	the increase in profit a firm anticipates it will obtain by purchasing capital (or engaging in research and development); expressed as a percentage of the total cost of the investment (or R&D) activity.
229924751	Investment Demand Curve	a curve or schedule that shows the amounts firms plan to invest at various possible values of real gross domestic product.
229924752	Multiplier	the ratio of a change in the equilibrium GDP to the change in investment or in any other component of aggregate expenditures or aggregate demand; the number by which a change in any component of aggregate expenditures or aggregate demand must be multiplied to find the resulting change in the equilibrium GDP.
229924753	Planned Investment	the amount that firms plan or intend to invest.
229924754	Investment Schedule	a curve or schedule that shows the amounts firms plan to invest at various possible values of real gross domestic product.
229924755	Aggregate Expenditures Schedule	a schedule or curve showing the total amount spent for final goods and services at different levels of real GDP
229924756	Equilibrium GDP	the level at which the total quantity of goods produced (GDP) equals the total quantity of goods purchased (C + Ig).
229924757	Leakage	(1) a withdrawal of potential spending from the income-expenditures stream via saving, tax payments, or imports; (2) a withdrawal that reduces the lending of the banking system.
229924758	Injection	an addition of spending to the income-expenditure stream; investment, government purchases, and net exports.
229924759	Unplanned Changes in Inventories	changes in inventories that firms did not anticipate; changes in inventories that occur because of unexpected increases or decreases of aggregate spending (of aggregate expenditures)
229924760	Net Exports	exports minus imports
229924761	Lump-sum Tax	a tax that is a constant amount (the tax revenue of government is the same) at all levels of GDP.
229924762	Recessionary Gap	the amount by which the aggregate expenditures schedule must shift upward to increase the real GDP to its full-employment, non-inflationary level.
229924763	Inflationary Gap	the amount by which the aggregate expenditures schedule must shift downward to decrease the nominal GDP to its full-employment non-inflationary level.