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Jacob Randall872842050Study Guide – ECON 1020 Exam 3Chapter 23: Aggregate Expenditure and Equilibrium Output Explain the principles of the Keynesian theory of consumptionExplain how equilibrium output is determined
Jacob Randall872842050Describe the multiplier processChapter 24: The Government and Fiscal PolicyFiscal policy Gov spending and taxing policies Monetary PolicyBehavior of federal reserve on interest ratesFederal surplus or deficitFed gov receipts minus expendituresDiscuss the influence of fiscal policies on the economyDescribe the effects of three fiscal policy multipliers
Jacob Randall8728420501/MPSImpact on YDelta G x 1/MPSTax multipliermultiplier-(MPC/MPS) Impact on YDelta T x –(MPC/MPS) Balanced budget multiplierMultiplier1Impact on YDelta G or Delta T because delta G= delta TCompare and contrast the federal budgets of three US government administrationsClintonIncreased fed income taxes (max 13%)Same with national debt BushLowere fed icome tax (min around 9%)Same for debtObamaIncreased fed income tax (about 10%)Same for debtExplain the influence of the economy on the federal government budgetAutomatic stabilizers Chapter 25: Money, the Federal Reserve, and the Interest Rate Define money and discuss its functionsoMoneyMeans of payment or mediums of exchanges What sellers accept Bartering required double coincidence of wantsoStore of value