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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! The AD-AS Model. Fig. 12-11, p. 361 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 for 2009, 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/index.php?page=forecasts&name=US http://rsqe.econ.lsa.umich.edu/Docs/summary.pdf
