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ACCELERATOR: The ratio between investment expenditures and the change in gross domestic product. This is based on the notion that business investment depends on the rate of growth of aggregate output. If the economy is expanding, in other words, then the business sector invests in more capital goods to produce the extra output needed. This accelerator effect modifies and magnifies the simply multiplier effect based on the induced consumption and the marginal propensity to consume.
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INDUCED EXPENDITURE: An aggregate expenditure (consumption, investment, government purchases, and net exports) that depends on national income or gross domestic product. These four aggregate expenditures are conveniently separated into two types, induced, which is our current topic of expenditures unrelated to national income or GDP, and autonomous expenditures, expenditures which are unrelated to national income or GDP. Induced expenditures are graphically depicted as the slope of the aggregate expenditures line, and depend in large part on the marginal propensity to consume. The induced relation between income and expenditures form the foundation of the multiplier effect triggered by changes in autonomous expenditures. See also | aggregate expenditures | autonomous expenditure | consumption expenditures | investment expenditures | government purchases | net exports | gross domestic product | national income | business cycle | multiplier | accelerator | induced consumption | induced investment | aggregate expenditures line |
Recommended Citation:INDUCED EXPENDITURE, AmosWEB GLOSS*arama, http://www.AmosWEB.com, AmosWEB LLC, 2000-2024. [Accessed: December 6, 2024].
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RISK POOLING The process of combining the risks facing individuals into larger groups. This process can be used effectively to transfer individual risks to the entire group. This makes it possible to calculated the risk for the group. Risk pooling is the standard technique that enables the provision of insurance services.
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RED AGGRESSERINE
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Today, you are likely to spend a great deal of time flipping through the yellow pages looking to buy either a handcrafted bird feeder or a New York Yankees baseball cap. Be on the lookout for telephone calls from long-lost relatives.
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The earliest known use of paper currency was about 1270 in China during the rule of Kubla Khan.
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"Use, do not abuse; neither abstinence nor excess ever renders man happy." -- Voltaire, philosopher
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