chapters 12-13 + appendix B

Question 1

disposable income

Answer 1

income after taxes

Question 2

expenditure multiplier

Answer 2

Keynesian concept that asserts that a change in autonomous spending causes a more than proportionate change in real GDP

Question 3

inflationary gap

Answer 3

equilibrium at a level of output above potential GDP

Question 4

recessionary gap

Answer 4

equilibrium at a level of output below potential GDP

Question 5

neoclassical perspective

Answer 5

the philosophy that, in the long run, the business cycle will fluctuate around the potential, or full-employment, level of output