The marginal propensity to consume (MPC) measures the portion of each additional unit of income that people spend
Glossary Category: Economics
average propensity to consume (apc)
The average propensity to consume (APC) represents the portion of total income that households spend on goods and
marginal propensity to save (mps)
The Marginal Propensity to Save (MPS) measures the portion of each extra unit of income that households choose
average propensity to save (aps)
The average propensity to save (APS) is the percentage of total income that households choose to save instead
open economy multiplier
The open economy multiplier calculates how much a change in initial spending will increase the total national income
closed economy multiplier
The closed economy multiplier measures how an initial change in spending creates a larger final change in national
multiplier (economics)
The multiplier measures how an initial change in spending—such as investment or government spending—affects the total national income.
national income determination
National income determination is the process of finding the point where an economy reaches balance, also known as
economic rent
Economic rent is the extra income a worker earns above their transfer earnings. Transfer earnings represent the minimum
transfer earnings
Transfer earnings represent the minimum amount a worker must be paid in their current job to prevent them