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What is it called when government spending does not exceed it income?
Balanced budget
What is the relationship between consumer spending and disposable personal income?
a direct relationship.
What is deficit financing?
Macroeconomics: Planned expenditure by a government to put more money into the economy than it takes out by taxation, with the expectation that increased business activity will bring enough additional revenue to cover the shortfall. Also called deficit spending. Microeconomics: Debt financing to cover excess of expenditure over income.
How do changes in income affect the demand for a good?
Increases in income allow for more disposable income which increases spending and the demand for goods. Decreases in income conversely decreases disposable income which decreases spending.
How do we calculate IS equilibrium of national income?
IS equilibrium in national income is achieved when the total output (income) in an economy equals total spending (expenditure). This is represented by the IS curve, which shows the relationship between interest rates and income where investment equals saving. To calculate it, we set the aggregate demand (consumption + investment + government spending + net exports) equal to the aggregate supply (national income) and solve for the income level. At the equilibrium point, any changes in interest rates will shift the IS curve, resulting in a new equilibrium income level.
What is it called when government spending does not exceed it income?
Balanced budget
What is the difference between capital income and capital expenditure?
Income is money coming in, expenditure is money going out (spending).
What is the relationship between consumer spending and disposable personal income?
a direct relationship.
What is deficit financing?
Macroeconomics: Planned expenditure by a government to put more money into the economy than it takes out by taxation, with the expectation that increased business activity will bring enough additional revenue to cover the shortfall. Also called deficit spending. Microeconomics: Debt financing to cover excess of expenditure over income.
Why is planned investment called an injection?
Planned investment is called an injection because it refers to new spending or investment that is added to the circular flow of income and expenditure in an economy. It injects additional income and spending into the economy, stimulating economic activity and potentially increasing aggregate demand. In contrast, unplanned changes in inventory levels are called leakages because they remove income and spending from the circular flow.
An economic policy that advocated a reduction in government spending and cuts in personal income taxes was called?
Reaganomics
What was the economic policy that advocated a reduction in government spending and cuts in personal income taxes called?
reagonomics
What causes a difference between desired spending and income in the monetarist model in the Keynesian model?
In the monetarist model, a difference between desired spending and income is caused by either an excess demand for money (MD > MS) or an excess supply of money (MS > MD). An excess demand for money reduces desired spending, and an excess supply increases it. In the Keynesian model, changes in desired spending (particularly in desired investment spending) cause the difference.
How do changes in income affect the demand for a good?
Increases in income allow for more disposable income which increases spending and the demand for goods. Decreases in income conversely decreases disposable income which decreases spending.
What can be removed from a budget if spending is higher than income?
Discretionary spending
Which model illustrates the continuous flow of spending production and income between the different sectors in an economy?
economic cycle
Do you have to claim the income if renters pay less than the mortgage?
Yes, it is still income, regardless of your expense. You should, however, be able to claim the shortfall as a tax write-off.
