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MARGINAL PROPENSITY FOR GOVERNMENT PURCHASES: The proportion of each additional dollar of national income that is used for government purchases. Or alternatively, this is the change in government purchases due to a change in national income. Abbreviated MPG, the marginal propensity for government purchases is the slope of the government purchases line used in the analysis of Keynesian economics. As such, it also plays a role in the slope of the aggregate expenditure line and the multiplier effect.
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Lesson 11: Circular Flow | Unit 2: Financial Markets
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Page: 7 of 22
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Topic:
The Paper Economy
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Financial markets divert national income from household consumption to business investment.- Real side: Goods and resources, physical production used to satisfy wants and needs.
- Paper side: Legal claims on these physical goods and resources. Examples: Corporate stocks, government bonds, money, bank statements, mortgage contracts.
- Trading legal claims through financial markets diverts income from consumption to investment.
- A legal claim buyer gets the legal claim, but gives up income. The legal claim seller gives up the claim and takes possession of the income.
- Income is diverted from a legal claim buyer (lender, saver) to a legal claim seller (borrower) through the financial markets.Two additional flows: Saving and Investment.
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ECONOMIC GOOD A tangible item produced with society's limited resources for the purpose of satisfying wants and needs. As a general notion, the phrase economic good also commonly includes intangible services produced with society's limited resources for the purpose of satisfying wants and needs. A synonymous term for economic good is scarce good.
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WHITE GULLIBON
[What's This?]
Today, you are likely to spend a great deal of time flipping through the yellow pages hoping to buy either a coffee cup commemorating the first day of winter or a video game player. Be on the lookout for telephone calls from former employers.
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This isn't me! What am I?
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Woodrow Wilson's portrait adorned the $100,000 bill that was removed from circulation in 1929. Woodrow Wilson was removed from circulation in 1924.
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"I can feel guilty about the past, apprehensive about the future, but only in the present can I act." -- Abraham Maslow, Psychologist
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RONA
Return on Net Assets
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