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RISK PREMIUM: This has two very closely related uses. First, it's what risk averse people are willing to pay to avoid a risky situation. For example, if you would be equally happy with a guaranteed $900 or a 50-50 chance of getting either $500 or $1,500, then you're risk premium is $100. Second, it's the extra percentage points added to an interest rate to compensate for the risk of a loan. As a general rule, each 1 percent chance of default on a loan adds a risk premium of about 1 percent to the interest rate.
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SLOPE, NET EXPORTS LINE The negative slope of the net exports line is based on the marginal propensity to import (MPM). Because net exports are exports minus imports, the induced change in imports causes an opposite change in net exports. As such, the slope of the net exports line is negative, less than zero (but greater than negative one). The slope of the net exports line affects the slope of the aggregate expenditures line and thus also affects the magnitude of the multiplier process.
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GRAY SKITTERY
[What's This?]
Today, you are likely to spend a great deal of time at a going out of business sale looking to buy either a computer that can play video games and burn DVDs or a black duffle bag with velcro closures. Be on the lookout for spoiled cheese hiding under your bed hatching conspiracies against humanity.
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This isn't me! What am I?
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A lump of pure gold the size of a matchbox can be flattened into a sheet the size of a tennis court!
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"Work is an extension of personality. It is achievement. It is one of the ways in which a person defines himself, measures his worth ‚ and his humanity. " -- Peter Drucker, author
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AEC
Annual Equivalent Costs
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