ECON-1010 Chapter Notes - Chapter 21: Disposable And Discretionary Income, Government Spending, Fiscal Multiplier

• School: Vanderbilt University
• Department: Economics
• Course: ECON-1010
• Professor: Hojjatallah Ghandi

Document Summary

Gdp: the value of all the nal goods and services produced in a country within a speci c time period. Total amount produced (total output or real gdp) = the total amount of spending individuals and institutions want to do in a year + the accumulation of inventories. Total output = total income for the economy. Every dollar of output of goods and services becomes income to someone. Gdp = c + i + g + (x - im) Spending by consumers is consumption, while spending by businesses is investment, even if the same item is purchased. Consumption: the total spending by individuals on goods and services in a year. Another determinant is the amount one must pay in taxes (because it takes away from income) Disposable income: income left over after taxes are paid. One is related to the amount of disposable income.