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AGGREGATE DEMAND CURVE: A graphical representation of the relation between aggregate expenditures on real production and the price level, holding all ceteris paribus aggregate demand determinants constant. The aggregate demand, or AD, curve is one side of the graphical presentation of the aggregate market. The other side is occupied by the aggregate supply curve (which is actually two curves, the long-run aggregate supply curve and the short-run aggregate supply curve). The negative slope of the aggregate demand curve captures the inverse relation between aggregate expenditures on real production and the price level. This negative slope is attributable to the interest-rate effect, real-balance effect, and net-export effect.

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Lesson 10: Gross Domestic Product | Unit 4: Measuring Income Page: 19 of 25

Topic: Personal Income <=PAGE BACK | PAGE NEXT=>

Personal income (PI) is the second income measure.
  • Personal Income is income RECEIVED by households.
  • Compare this with national income which is income earned by the factors of production.
These two income measures are similar, but not exactly the same.
  • Some income earned by the factors of production is not received by the household sector. Let's call it IEBNR.
  • Some income received by the household sector is not earned by a factor of production. Let's call it IRBNE.

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FEDERAL FUNDS MARKET

A financial market used by commercial banks and other depository institutions regulated by the Federal Reserve System to lend and borrow Federal funds (Federal Reserve deposits). The interest rate charged for lending through the Federal funds market is the Federal funds rate.

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BROWN PRAGMATOX
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Today, you are likely to spend a great deal of time searching for rummage sales hoping to buy either a flower arrangement with daisies and carnations for your uncle or a coffee cup commemorating next Thursday. Be on the lookout for jovial bank tellers.
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The 22.6% decline in stock prices on October 19, 1987 was larger than the infamous 12.8% decline on October 29, 1929.
"Act well at the moment, and you have performed a good action for all eternity."

-- Johann Kaspar Lavater

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