PPT-10a – The Spending Multiplier

This web quiz may appear as two pages on tablets and laptops I recommend that you view it as one page by clicking on the open book icon at the bottom of the page 10a The Spending Multiplier. www.lancaster.ac.uk/postgrad/murphys4/. s.murphy5@lancaster.ac.uk. office. : LUMS . C85. Keynesian Cross Diagram. Last week we calculated GDP using the expenditure method where . . GDP . = Aggregate Expenditure (AE) = C + I + G + . “Fiscal Policy in a Depressed Economy”. Discussion by Valerie A. Ramey. Brookings. March 23, 2012. 1. 2. Outline. Summary. of DeLong and Summers view.. Notable elements of their . model. .. Test of ability of government spending to reverse . 1.. Disposable income is the money one has after paying taxes (the money one has to live on).. Marginal Propensity to Consume. The increase in household savings when disposable income rises by $1. Marginal Propensity to Save. T. he . number of times a rise in GDP exceeds the rise in injections that caused it. .. Eg. . if £10M increase in net injections results in £10.4 increase in GDP then the multiplier is 1.4 . The Multiplier. What is the nature of the multiplier and the meaning of aggregate consumption function?. How do both lead to changes in consumer spending?. How does expected future income and aggregate wealth affect consumer spending?. Review HW: Activity 3-1. Lesson 2-2: The Multiplier. The Multiplier. Q: What is the l. argest . component of . AD? . Consumption depends largely on…. Income!. Q: What determines a person’s level of consumption?. Aggregate Expenditures. The total amount spent on final goods and services. . AE consists of (C) consumption + (. Ig. ) Gross Investment. . AE = C + . Ig. Equilibrium GDP. The level at which the total quantity of goods produced equals the total quantity purchased. . and the . Historical . Development of Macroeconomics. The Historical Evolution . of Macroeconomics. The Great Depression . and . Macroeconomics. The Great Depression exerted a huge impact . on macroeconomics. The . open economy circular flow model. The . markets. National . account aggregates and conversions. The . multiplier:. Definition . of multiplier effect. Explanation . of the multiplier process aided with . Explain why fiscal policy has a multiplier effect. Describe how automatic stabilizers influence the multiplier effect. Section 4 | Module 21. Today’s Agenda. Thursday’s Test. Austrian vs Chicago school . IS. -. LM. Model. Chapter . 11 . of . Macroeconomics. , . 10. th. . edition, by N. Gregory . Mankiw. ECO62. . Udayan. . Roy. Static Short-Run Macroeconomics. In this chapter, I will describe the . “ President Obama announces a second stimulus package that will inject. $50B in additional funds for the Stimulus and Recovery Act.”. Consumption & Savings. MPC, MPS & Multiplier Analysis:. TOPIC 1. NI is the value of all goods and services produced in the economy in a year.. It measures the economic performance of a country.. WHAT IS NATIONAL INCOME?. This can be done in 3 ways:. GROSS DOMESTIC PRODUCT (GDP). Workshop: Evaluating the Economic Impacts of Local and Regional Food . System. University of Tennessee Eastern Region Extension office. Knoxville, TN February 20, 2017. Topics. What is an economic multiplier?.