A line on a graph that represents the total quantity of a good or service consumed at each price level within a range of prices. For most normal goods, the quantity demanded decreases as the price increases, producing a downwardly sloping line on the graph.
The utilization of economic theories and principles to address practical real-world problems and inform governmental policy-making.
Asset demand for money refers to the desire to hold money as a store of value rather than other forms of investment. This occurs when individuals or businesses forgo potential interest earned from assets in favor of liquidity and stability that money offers.
Deficit financing refers to the practice by a government agency of borrowing funds to cover a revenue shortfall. While this method can stimulate the economy in the short term, prolonged deficit financing may drive up interest rates and eventually slow economic growth.
A fiscalist is an economist who believes that government intervention in the economy, primarily through changes in taxation and government spending, is essential for managing economic stability and growth.
Economic analysis developed by John Maynard Keynes based on the interaction of the money market and the goods market. It helps predict the effect of monetary and fiscal policies on interest rates and domestic production.
Keynesian Economics is a body of economic thought originated by the British economist John Maynard Keynes. Keynes asserted that government should manipulate the level of aggregate demand to address unemployment and inflation.
Liquidity preference is an element of Keynesian economic theory that examines the relative preference of investors to hold money rather than bonds or other investments. It influences the level of economic activity and is related to interest rates and return on investment (ROI).
New Economics refers to revisions of Keynesian Economics that emerged in the 1970s, aimed at addressing economic issues inadequately managed by traditional Keynesian approaches.
The Paradox of Thrift is the proposition that increased saving by households reduces their consumption and, consequently, reduces Gross Domestic Product (GDP).
An economic policy of increasing government expenditures and/or reducing taxes in order to stimulate the economy to higher levels of output. Pump priming measures are temporary, aimed at fostering spontaneous and sustained economic growth.
