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Economic Multipliers and Monetary Theory: Consumption, Savings and GDP Relationships

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Economics - Macroeconomics

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charlotte1oxhi Created by 10 mon ago

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Cards in this deck(18)
The marginal propensity to consume (MPC) is calculated as the change in consumption (∆C) divided by the change in _____ (∆ income).
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The marginal propensity to save (MPS) is calculated as the change in savings (∆S) divided by the change in _____ (∆ income).
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The sum of the marginal propensity to consume (MPC) and the marginal propensity to save (MPS) equals _____.
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The change in real GDP (∆ RGDP) is calculated as the multiplier times the change in _____.
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The investment multiplier is calculated as 1 divided by the marginal propensity to save (MPS), which is 1/_____.
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The government spending multiplier is calculated as 1 divided by the marginal propensity to save (MPS), which is 1/_____.
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The tax multiplier is calculated as the negative of the marginal propensity to consume (MPC) divided by the marginal propensity to save (MPS), which is -MPC/_____.
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The money multiplier is calculated as 1 divided by the reserve ratio (RR), which is 1/_____.
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The equation of exchange is represented as MV = PQ, where M is the money supply, V is the velocity of money, P is the price level, and Q is the quantity of _____.
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The current account records a country's transactions involving the export and import of goods and services, as well as income from investments such as interest and _____.
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The capital account records a country's transactions involving the purchase and sale of assets such as stocks, bonds, and _____.
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The real interest rate is calculated as the nominal interest rate minus the rate of _____.
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The real GDP is calculated as the nominal GDP minus the rate of _____.
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Gross Domestic Product (GDP) is calculated as the sum of consumption (C), investment (I), government spending (G), and net exports (Xn), which is C + I + G + _____.
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In accounting, assets are equal to _____.
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The price index market basket is calculated as the current year price divided by the base year price, multiplied by 100, which is (current year/base year) x _____.
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The price index is calculated as the nominal GDP divided by the real GDP, multiplied by 100, which is (nominal GDP/RGDP) x _____.
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Inflation is calculated as the change in price level from the old period to the new period, divided by the old period, multiplied by 100, which is ((new - old)/old) x _____.
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