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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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Lesson 10: Gross Domestic Product | Unit 4: Measuring Income
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Page: 18 of 25
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The first three related, but slightly different income measures is national income (NI), income earned by the factors of production.- National income is the sum of wages (W), interest (I), rent (R), profit (P) and proprietors' income (PI):
NI = W + I + R + P + PI - National income is also found by subtracting capital consumption allowance (CCA) and indirect business taxes (IBT) from, and adding net foreign factor income (NFFI) to, GDP:
NI = GDP - CCA - IBT + NFFI - And because NDP = GDP - CCA:
NI = NDP - IBT + NFFI
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AGGREGATE SUPPLY The total (or aggregate) real production of final goods and services available in the domestic economy at a range of price levels, during a given time period. Aggregate supply, usually abbreviated AS, is two different relations between price level and real production--long run and short run. With long-run aggregate supply, prices and wages are flexible and all markets are in equilibrium. With short-run aggregate supply some prices and wage are NOT flexible and some markets are NOT in equilibrium. This is one half of the AS-AD (aggregate market) analysis. The other half is aggregate demand.
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YELLOW CHIPPEROON
[What's This?]
Today, you are likely to spend a great deal of time strolling around a discount warehouse buying club seeking to buy either a package of blank rewritable CDs or yellow cotton balls. Be on the lookout for poorly written technical manuals.
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This isn't me! What am I?
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The first paper currency used in North America was pasteboard playing cards "temporarily" authorized as money by the colonial governor of French Canada, awaiting "real money" from France.
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"We succeed in enterprises (that) demand the positive qualities we possess, but we excel in those (that) can also make use of our defects." -- Alexis de Tocqueville, Statesman
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SPE
Subgame Perfect Equilibrium
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