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MARGINAL PROPENSITY TO INVEST: The proportion of each additional dollar of national income that is used for investment expenditures. Or alternatively, this is the change in investment expenditures due to a change in national income. Abbreviated MPI, the marginal propensity to invest is the slope of the investment 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 23: Factor Market Equilibrium | Unit 1: Intro
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Page: 6 of 24
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In this unit, you should have learned about:- Factor markets that exchange the services of the four factors of production -- labor, capital, land, and entrepreneurship.
- The two sides of the factor market -- factor demand and factor supply.
- The key role that marginal revenue product plays in factor demand.
- The key role that marginal facto cost plays in factor supply.
- How equilibrium applies to factor markets as a balance in the forces of factor demand and factor supply.
- The role of competition in factor markets and how relatively different competition among buyers and sellers affects the factor market.
- The role factor markets play in the overall economy as seen through the circular flow.
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BALANCED-BUDGET MULTIPLIER A measure of the change in aggregate production caused by equal changes in government purchases and taxes. The balanced-budget multiplier is equal to one, meaning that the multiplier effect of a change in taxes offsets all but the initial production triggered by the change in government purchases. This multiplier is the combination of the expenditures multiplier, which measures the change in aggregate production caused by changes in an autonomous aggregate expenditure, and the tax multiplier which measures the change in aggregate production caused by changes in taxes.
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BEIGE MUNDORTLE
[What's This?]
Today, you are likely to spend a great deal of time browsing about a thrift store seeking to buy either a rechargeable battery for your cell phone or a T-shirt commemorating the 2000 Olympics. Be on the lookout for door-to-door salesmen.
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This isn't me! What am I?
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Lewis Carroll, the author of Alice in Wonderland, was the pseudonym of Charles Dodgson, an accomplished mathematician and economist.
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"You don't have to see the top of the staircase to take the first step.¾ " -- Martin Luther King, civil rights leader
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Q-RATIO
Ratio of Total Market Value of Physical Assets
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