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Expectations as to the
values of economic variables for current and future periods formulated on
the basis of the variables past performance.
Expenditures for final goods
and services by consumers.
The function relating
consumption expenditures to their determinants.
A change in the rate at
which the money supply is being changed each period.
The percent increase in
prices which is expected to occur over a specified period.
In Aggregate Demand: Changes
in the amount of aggregate output demanded at the existing price level.
Aggregate investment
expenditures desired expressed as a function of the interest rate and other
determinants.
A weighted average of the
interest rates observed in the market for securities and savings deposits.
The effect of the money
market in diminishing the decline in equilibrium output and real income
which occurs when aggregate demand declines as a result of real
disturbances.
Changes in the money supply
The function relating real
money balances demanded to its determinants (the market interest rate and
real income, in this book). or shifts in the money demand function.
The condition existing when
the money supply is increased and remains fixed at the higher level.
Expectations formulated on
the basis of all available information. John Muth, in putting forward the
rational expectations hypothesis, argued that the aggregate of rationally
formulated expectations is essentially the same as the prediction of the
relevant economic theory.
Disturbances involving
shifts in the investment and aggregate saving (including government saving)
functions.
The market rate of interest
less the adjustment for purchasing power losses caused by inflation.
The equilibrium state of a period
(or dynamic) model.
The Function relating real
government tax receipts to aggregate real income.
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