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Chapter 11. Income and Expenditure. Link to syllabus. Skip Income-Expenditure Equilibrium, pp. 326-331 (a.k.a. ‘The Keynesian Cross’). Also , skip the accelerator model of investment p. 323, and changes in inventories. Previews of (Still) Coming Attractions!. - PowerPoint PPT Presentation
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Chapter 11. Income and Expenditure
Link to syllabus
Skip Income-Expenditure Equilibrium, pp. 326-331 (a.k.a. ‘The Keynesian Cross’).
Also, skip the accelerator model of investment p. 323, and changes in inventories.
The AD-AS Model. Fig. 12-11, p. 361
Previews of (Still) Coming Attractions!
Further Previews of Coming Attractions !Shifts of Aggregate Demand Fig. 12-4, p. 346
Caused by changes in Business Investment or Government Expend.
Consumption Function,
Figures 11-1 and 11-2, pp.
316-317
Actual data for2009, by deciles
Link to ISR
http://www.isr.umich.edu/
Latest news release
Link to RSQE forecast
Example of U-M’s Consumer Survey, 2002
Formulas and Definitions for The Multiplier.
p. 314
Rounds of Increases of Real GDP. ΔAAS=100, MPC=0.6
p. 313
Thus the multiplier is 250/100 = 2.5 which is 1/(1 – 0.6)
Table 11-2 p. 314. Investment, Consumption, and Real GDP in the Great Depression.
Fluctuations in Consumption and Investment Spending During Recessions. Fig 11-6, p. 322
Spending on business investment is much more unstable than consumption
Links to RSQE
http://rsqe.econ.lsa.umich.edu/Docs/summary.pdf
http://rsqe.econ.lsa.umich.edu/index.php?page=forecasts&name=US