The combination of this concept and the accelerator theory of investment are the basis of the Hansen-Samuelson economic model of the business cycle. The version of this quantity applied to taxes equals the opposite of the marginal propensity to consume divided by the marginal propensity to save, and the type of this quantity applied to spending equals the reciprocal of the marginal propensity to save. Keynesian [“CANE”-zee-un] economists often apply this concept to show that government spending has an outsized impact on aggregate demand. Give this term for a type of factor that equals a ratio between output and input.
The combination of this concept and the accelerator theory of investment are the basis of the Hansen-Samuelson economic model of the business cycle. The version of this quantity applied to taxes equals the opposite of the marginal propensity to consume divided by the marginal propensity to save, and the type of this quantity applied to spending equals the reciprocal of the marginal propensity to save. Keynesian [“CANE”-zee-un] economists often apply this concept to show that government spending has an outsized impact on aggregate demand. Give this term for a type of factor that equals a ratio between output and input.
The combination of this concept and the accelerator theory of investment are the basis of the Hansen-Samuelson economic model of the business cycle.