ECN 204 Chapter Notes - Chapter 10: Real Interest Rate, Disposable And Discretionary Income, Marginal Cost
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Ecn 204 chapter 10 basic macroeconomic relationships. Economists de ne personal saving as not spending or as that part of disposable (after tax) income not consumed . Saving (s) = disposable income (di) - consumption (c) Disposable income is the most signi cant factor that determines a nation"s levels of consumption. In the aggregate households increase their spending as their disposable income rises and spend a larger proportion of a smaller disposable income than a larger disposable income. Shows the relationship between saving and di but that saving is a smaller proportion of a small di than a large di. Average propensity to consume (apc) the fraction (or %) of total income that is consumer is the. Average propensity to save (aps) the fraction (or %) go total income that is saved. Marginal propensity to consumer (mpc) the proportion (or fraction) of any change in income consumed with marginal meaning extra or a change in.