Macroeconomics

Mundell–Fleming model:

The IS–LM model for

a small open economy.

Mundell–Tobin effect:

The fall in the real interest

rate that results when an increase in expected infla-

tion raises the nominal interest rate, lowers real

money balances and real wealth, and thereby reduces

consumption and raises saving.

NAIRU:

Non-accelerating inflation rate of 

unemployment.

National income accounting:

The accounting

system that measures GDP and many other related

statistics.

National income accounts identity:

The equa-

tion showing that GDP is the sum of consumption,

investment, government purchases, and net exports.

National saving:

A nation’s income minus con-

sumption and government purchases; the sum of

private and public saving.