Examlex
Verify that the equation is an identity.
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Marginal Propensity
The portion of additional income that an individual is likely to spend on goods and services instead of saving.
Price Level
The average of current prices across the entire spectrum of goods and services produced in the economy, which can affect purchasing power and inflation.
Aggregate Expenditure Line
A graphical representation of the total spending in an economy, including consumption, investment, government, and net exports, at various levels of income.
Marginal Propensity
The proportion of an additional increment of income that is spent on consumption. It reflects the change in consumption resulting from a change in income.
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