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TAX MULTIPLIER: The ratio of the change in aggregate output (or gross domestic product) to an autonomous change in a taxes. The tax multiplier is equal to the expenditure multiplier times the marginal propensity to consume. This is based on the only a fraction of the change in disposable income resulting from the change in taxes will result in a change in consumption expenditures. The tax multiplier can be used to indicate the change in fiscal policy induced government taxes are needed to achieve a given level of aggregate output (presumably full-employment output).
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GOVERNMENT SECURITIES: Financial instruments used by the federal government to borrow money. Government securities are issued by the U.S. Treasury to cover the federal government's budget deficit. Much like consumers who borrow money from banks to finance the purchase of a house or car, the federal government borrows money to finance some of its expenditures. These securities include small denomination ($25, $50, or $100), nonnegotiable Series EE savings bonds purchased by consumers. The really serious money, however, is borrowed using larger denomination securities ($100,000 or more) purchased by banks, corporations, foreign governments, and others with large sums of money to lend. See also | government borrowing | government sector | budget deficit | Treasury bill | Treasury note | Treasury bond | government debt | open market operations | bank | corporation | money creation | risk |
Recommended Citation:GOVERNMENT SECURITIES, AmosWEB GLOSS*arama, http://www.AmosWEB.com, AmosWEB LLC, 2000-2024. [Accessed: October 15, 2024].
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SLOPE, NET EXPORTS LINE The negative slope of the net exports line is based on the marginal propensity to import (MPM). Because net exports are exports minus imports, the induced change in imports causes an opposite change in net exports. As such, the slope of the net exports line is negative, less than zero (but greater than negative one). The slope of the net exports line affects the slope of the aggregate expenditures line and thus also affects the magnitude of the multiplier process.
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Today, you are likely to spend a great deal of time wandering around the downtown area trying to buy either a pair of blue silicon oven mitts or a coffee cup commemorating the 2000 Olympics. Be on the lookout for mail order catalogs with hidden messages.
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In his older years, Andrew Carnegie seldom carried money because he was offended by its sight and touch.
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"Success is more a function of consistent common sense than it is of genius. " -- An Wang, industrialist
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