The value of current production, but using prices from a fixed point in time.

Today’s income measured in base year dollars.

The cost of borrowing to fund an investment. This can be thought of as the marginal cost of an investment project.

In the AD and AS model, this is described as falling ad with a constant as curve. GDPR falls far below fe levels and the u% rises.

The amount by which full-employment gdp exceeds equilibrium GDP.

The proportion of income paid in taxes decreases as income rises. An example is a sales tax.

The number of units of any other good y that must be sacrificed to acquire the first good x.

Natural resources that can replenish themselves if they are not over-harvested.

portion of a deposit that must be held at the bank for withdrawals.

The fraction of total deposits that must be kept on reserve.