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Lecture_21_Presentation

Lecture_21_Presentation - Lecture 21 Spending multipliers...

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Lecture 21 1 of Professor David Lee AEM 230 / ECON 230 “Spending multipliers” measure total response of national income to policy stimulus Define: m = marginal propensity to import (“leakage”) = s = marginal propensity to save (“leakage”) = Change in imports (at margin) Change in real national income Change in savings (at margin) Change in real national income
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