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FINANCIAL WEALTH, AGGREGATE DEMAND DETERMINANT: One of several specific aggregate demand determinants assumed constant when the aggregate demand curve is constructed, and that shifts the aggregate demand curve when it changes. An increase in financial wealth causes an increase (rightward shift) of the aggregate curve. A decrease in financial wealth causes a decrease (leftward shift) of the aggregate curve. Other notable aggregate demand determinants are interest rates, federal deficit, inflationary expectations, and the money supply.
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MARGINAL PROPENSITY TO CONSUME The proportion of each additional dollar of household income that is used for consumption expenditures. The marginal propensity to consume (abbreviated MPC) is another term for the slope of the consumption line and is calculated as the change in consumption divided by the change in income. The MPC plays a central role in Keynesian economics. It quantifies the consumption-income relation and the fundamental psychological law. It is also a foundation for the slope of the aggregate expenditures line and is critical to the multiplier process. A related consumption measure is the average propensity to consume.
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BLACK DISMALAPOD
[What's This?]
Today, you are likely to spend a great deal of time at a going out of business sale looking to buy either a T-shirt commemorating the first day of spring or a coffee cup commemorating last Friday (you know why). Be on the lookout for door-to-door salesmen.
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This isn't me! What am I?
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Lewis Carroll, the author of Alice in Wonderland, was the pseudonym of Charles Dodgson, an accomplished mathematician and economist.
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"It is not fair to ask of others what you are unwilling to do yourself. " -- Eleanor Roosevelt, diplomat, activist
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ITO
International Trade Organization
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