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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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TROUGH: The transition of a business cycle from a contraction and an expansion. The end of a contraction carries the descriptive term trough. At the trough, the economy has reached the lowest level of production in recent times. The good thing about a trough, however, is that it is a turning point, a turning point to an expansion. So even though a peak is the "lowest" is not necessarily something that's undesirable.

     See also | business cycle | contraction | expansion | recession | peak |


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TROUGH, AmosWEB GLOSS*arama, http://www.AmosWEB.com, AmosWEB LLC, 2000-2023. [Accessed: June 8, 2023].


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AVERAGE PROPENSITY TO SAVE

The proportion of household income that is used for saving. The average propensity to save (abbreviated APS) is really nothing more than average saving. Together with the average propensity to consume, it indicates how a given level of income is divided between consumption and saving. A related saving measure is the marginal propensity to save.

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