* Full employment : Persons who are willing to work and able to work must have employment or a job
*Unemployment : when there are people, who are willing to work and able to work but cannot find suitable jobs.
*Disguised unemployment : It is found in which when more people are doing work than actually required. 12-Economics-Chapter_3.indd 47 47 T he equality between saving and investment is achieved through changes of rate of interest. Rate of interest is determined by saving and investment. Rate of interest is a stock. Supply creates its own demand. Rate of interest is a reward for saving.
* Under employment : Resources (eg. Labour) are not fully utilized in production
*Effective demand : The amount of money which entrepreneurs expect to get by the output product.
*Aggregate demand : The amount that households, firms, the governments and the foreign purchasers would like to spend on domestic output.
*Aggregate supply : The value of total output of goods and services produced in an economy in a year.
*Marginal Propensity to Consume : The additional consumption due to an additional unit of income.
*Marginal Efficiency of Capital : The expected rate of return over costs of a new capital good.
*Money supply : The total stock of money circulating in an economy.