What's it: Disposable income is the money you have left after paying taxes. You can use it for savings or to buy goods and services.Disposable income is essential to describe household purchasing power. When it increases, we expect
Fiscal Multiplier
Balanced Budget Multiplier: Impact on GDP – How It Works, Limitations
The balanced budget multiplier focuses specifically on the impact of government spending and taxes when they are adjusted at the same rate. It might seem counterintuitive, but even when the government maintains a balanced budget (revenue equals
Fiscal Multiplier Explained: Impact of Government Spending on the Economy – Formula, Criticisms
Fiscal Multiplier is a powerful concept in economics that helps us understand the impact of government spending on an economy's overall health. It measures how much a change in government spending, either through increased spending or tax cuts,
Marginal Propensity to Save (MPS): Impact on Investment and Growth [Formula, Determinants]
Marginal Propensity to Save (MPS) is a key concept in economics that helps us understand how changes in income affect household saving behavior. It essentially measures the portion of additional disposable income that households choose to save for
Marginal Propensity to Consume (MPC): Key to Understanding Economic Growth [Formula, Determinants]
Marginal Propensity to Consume (MPC) is a key concept in economics that helps us understand how changes in income affect aggregate expenditure, the total spending on goods and services in an economy. It essentially measures the portion of additional