Macroeconomics

Political business cycle:

The fluctuations in out-

put and employment resulting from the manipula-

tion of the economy for electoral gain.

Portfolio theories of money demand:

Theories

that explain how much money people choose to

hold and that stress the role of money as a store of

value. (Cf. transactions theories of money demand.)

Precautionary saving:

The extra saving that re-

sults from uncertainty regarding, for example,

longevity or future income.

Predetermined variable:

A variable whose value

was fixed in a previous period of time.

Present value:

The amount today that is equivalent

to an amount to be received in the future, taking

into account the interest that could be earned over

the interval of time.

Private saving:

Disposable income minus 

consumption.

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Procyclical:

Moving in the same direction as out-

put, incomes, and employment over the business

cycle; falling during recessions and rising during re-

coveries. (Cf. acyclical, countercyclical.)