Macroeconomics

General equilibrium:

The simultaneous equilib-

rium of all the markets in the economy.

GNP:

See gross national product.

Gold standard:

A monetary system in which gold

serves as money or in which all money is convertible

into gold at a fixed rate.

Golden rule:

The saving rate in the Solow growth

model that leads to the steady state in which con-

sumption per worker (or consumption per efficiency

unit of labor) is maximized.

Government purchases:

Goods and services

bought by the government. (Cf. transfer payments.)

Government-purchases multiplier:

The change

in aggregate income resulting from a one-dollar

change in government purchases.

Gross domestic product (GDP):

The total in-

come earned domestically, including the income

earned by foreign-owned factors of production; the

total expenditure on domestically produced goods

and services.