|
|
QUALITY OF LIFE: A common term used to indicate the overall level of well-being or welfare of a person or group of people, taking into account both monetary and non-monetary factors. This notion is theoretically synonymous with utility and the satisfaction of wants and needs. However, from a practical standpoint, attempts have been made to measure the quality of life, primarily as a means of comparison between communities. Quality of life measures are composite indexes based on monetary factors such as income, wages, living costs, and taxes, combined with non-monetary factors such as crime rate, air quality, and education level.
Visit the GLOSS*arama
|
|
|
|
                           SLOPE, GOVERNMENT PURCHASES LINE: The positive slope of the government purchases line is also termed the marginal propensity for government purchases (MPG). This slope is greater than zero but less than one, reflecting induced government purchases. The slope of the government purchases line affects the slope of the aggregate expenditures line and thus also affects the magnitude of the multiplier process. | Government Purchases Line | 
|
The government purchases line shows the relation between government purchases by the government sector and the level of aggregate income or production. The income and production measures most commonly used are national income and gross domestic product.A representative government purchases line is presented in the exhibit to the right. This red line, labeled G in the exhibit, is positively sloped, indicating that greater levels of income or production generate greater government purchases by the government sector. This positive relation indicates that the government sector, especially state and local governments, is inclined to use increasing tax revenue generated by an expanding economy for government purchases. The government purchases line graphically illustrates the government purchases-income relation for the government sector, which plays a key role in the aggregate expenditures line used in Keynesian economics to identify equilibrium income and production. The slope of the government purchases line presented here is positive, but less than one. In fact, the slope of the government purchases line is numerically equal to the marginal propensity for government purchases. In this case the slope is equal to 0.05. The positive slope reflects induced government purchases--more income means more government purchases. Click the [Slope] button to illustrate. To illustrate the equality between slope and the marginal propensity for government purchases, consider the equations for each. The slope of the government purchases line is specified as the "rise" over the "run." The rise is the change in government purchases measured on the vertical axis and the run is the change in income measured on the horizontal axis. | slope | = | rise
run | = | change in government purchases
change in income |
The marginal propensity for government purchases (MPG) is the incremental change in government purchases resulting from an incremental change in income. | MPG | = | change in government purchases
change in income |
The slope of the government purchases line is the marginal propensity for government purchases, they are one and the same.The positive slope of the government purchases line reflects induced government purchases, which is government purchases that depend on the level of income. If the aggregate economy has more income, then the government sector is induced to undertake additional government purchases. Of course, a drop in aggregate income induces the government sector to reduce expenditures.
Recommended Citation:SLOPE, GOVERNMENT PURCHASES LINE, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2024. [Accessed: April 19, 2024].
Check Out These Related Terms... | | | | | | | | | |
Or For A Little Background... | | | | | | | | | |
And For Further Study... | | | | | | | | | | | | | | |
Search Again?
Back to the WEB*pedia
|
|
|
GRAY SKITTERY
[What's This?]
Today, you are likely to spend a great deal of time strolling around a discount warehouse buying club wanting to buy either a tall storage cabinet with five shelves and a secure lock or a birthday greeting card for your grandmother. Be on the lookout for cardboard boxes.
Your Complete Scope
This isn't me! What am I?
|
|
|
General Electric is the only stock from the original 1896 Dow Jones Industrial Average remaining in the current index.
|
|
|
"The past is a foreign country; they do things differently there." -- Leslie Poles Hartley, Writer
|
|
NY
Net Yield
|
|
|
Tell us what you think about AmosWEB. Like what you see? Have suggestions for improvements? Let us know. Click the User Feedback link.
User Feedback
|
|
