Macroeconomics

Average propensity to consume (APC):

The

ratio of consumption to income (C/Y ).

Balance sheet:

An accounting statement that

shows assets and liabilities.

Balanced budget:

A budget in which receipts

equal expenditures.

Balanced growth:

The condition under which

many economic variables, such as income per per-

son, capital per person, and the real wage, all grow at

the same rate.

Balanced trade:

A situation in which the value of

imports equals the value of exports, so net exports

equal zero.

Bank capital:

The resources the bank owners have

put into the institution.

Baumol–Tobin model:

A model of money de-

mand positing that people choose optimal money

holdings by comparing the opportunity cost of the

forgone interest from holding money and the benefit

of making less frequent trips to the bank.

Bond:

A document representing an interest-bearing

debt of the issuer, usually a corporation or the

government.