AP Notes, Outlines, Study Guides, Vocabulary, Practice Exams and more!

Multiplier

Krugman Macroeconomics Chapter 21

Subject: 
Economics
Rating: 
0
No votes yet
Tags: 
economics
macroeconomics
Fiscal policy
Public finance
Economic policy
Macroeconomic policy
Automatic stabilizer
Fiscal multiplier
Multiplier
Tax
Contractionary monetary policy
Interaction between monetary and fiscal policies
Business
Politics

Module 21: Fiscal Policy and the Multiplier ? Why fiscal policy has a multiplier effect How the multiplier effect is influenced by automatic stabilizers ? Multiplier Effects of an Increase in Government Purchases of Goods and Services Government purchase ? firms earn revenues ? money flows to households ? increase disposable income ? rise in consumer spending ? firms increase output ? rise in disposable income ? Multiplier Effects of Changes in Government Transfers and Taxes Fiscal Policy: government purchases of goods and services change transfer payments or taxes change in government transfers or taxes shifts the aggregate demand curve by less than an equal-sized change in government purchases

Krugman AP Macroeconomics Module 16

Subject: 
Economics
Rating: 
0
No votes yet
Tags: 
macroeconomics
economics
Marginal propensity to consume
Consumption function
Disposable and discretionary income
Marginal propensity to save
Consumer spending
Gross domestic product
Permanent income hypothesis
Consumption
Multiplier
Investment
Business
health
behavior
Human development
Interpersonal relationships
Love
Psychoanalysis
Human behavior
Attachment theory
Evolutionary biology
Personal life
Technology

Module 16: Income and Expenditure -The nature of the multiplier, which shows how initial changes in spending lead to further changes -The meaning of the aggregate consumption function, which shows how current disposable income affects consumer spending -How expected future income and aggregate wealth affect consumer spending -The determinants of investment spending -Why investment spending is considered a leading indicator of the future state of the economy ? Assumptions: 1. We assume producers are willing to supply additional output at a fixed price causing changes in overall spending translate into changes in aggregate output 2. We take the interest rate as given 3. We assume that there is no government spending and no taxes

Macroeconomics Formula Sheet

Subject: 
Economics
Rating: 
0
No votes yet
Tags: 
macroeconomics
economics
IS/LM model
Crowding out
Expansionary monetary policy
Fiscal policy
Contractionary monetary policy
Gross domestic product
Fiscal multiplier
monetary policy
Multiplier
Supply-side economics
Business

Inflationary Gap: At Capacity, The difference between Planned Expenditure and Agg. Output (rise in price not met with rise in Y) Causes of Inflation: Demand Pull ? initiated by MD? Cost Push/Supply-Side ? caused by ?Costs and ?Supply Stagflation- Causes both Y? P? - BAD NEWS Expectations: Of price increases cause companies to collectively pre-empt by increasing prices causing the real price to rise Monetary/Fiscal: Expansionary monetary/Fiscal policy at capacity will also push up AD causing inflation Lags: Recognition, Implementation -much longer for Fiscal Policies, Response - time it takes for the economy to adjust after implementation- much longer for Monetary Policies)
Subscribe to RSS - Multiplier

Need Help?

We hope your visit has been a productive one. If you're having any problems, or would like to give some feedback, we'd love to hear from you.

For general help, questions, and suggestions, try our dedicated support forums.

If you need to contact the Course-Notes.Org web experience team, please use our contact form.

Need Notes?

While we strive to provide the most comprehensive notes for as many high school textbooks as possible, there are certainly going to be some that we miss. Drop us a note and let us know which textbooks you need. Be sure to include which edition of the textbook you are using! If we see enough demand, we'll do whatever we can to get those notes up on the site for you!