Economics 14/e   McConnell
	Online Learning Center

multiplier

The ratio of a change in the equilibrium GDP to the change in investment or in any other component of aggregate expenditures or aggregate demand; the number by which a change in any component of aggregate expendi-tures or aggregate demand must be multiplied to find the resulting change in the equilibrium GDP.

net exports

Exports minus imports.

lump-sum tax

A tax which is a constant amount (the tax revenue of government is the same) at all levels of GDP.

balanced-budget multiplier

The extent to which an equal change in government spending and taxes changes equilibrium gross domestic product; always has a value of 1 since it is equal to the amount of the equal changes in G and T.

recessionary gap

The amount by which the aggregate expenditures schedule must shift upward to increase the real GDP to its full-employment noninflationary level.

inflationary gap

The amount by which the aggregate expenditures schedule must shift downward to decrease the nominal GDP to its full-employment noninflationary level.

Copyright ©1998 The McGraw-Hill Companies. All rights reserved.Any use is subject to the Terms of Use and Privacy Policy.
McGraw-Hill Higher Education is one of the many fine businesses of The McGraw-Hill Companies.
For further information about this site contact mhhe_webmaster@mcgraw-hill.com.