The Algebra of Aggregate Demand

The Algebra of Aggregate Demand - Economics 200...

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Economics 200 Macroeconomic Theory The Algebra of Aggregate Demand Goods Market ÊMW Curve IœGMK Gœ+,Ð]XÑ XœX >] E MœD.< KœK marginal propensity to consume out of disposable income autonomous consumption tax rate E autonomous part of net taxes Iœ +,Ò]  ÐX >]ÑÓ  K X G M œ+,X  EÐ<Ñ èëëëëëëëëëëéëëëëëëëëëëê èëëéëëê ç èëëëëëëëëëéëëëëëëëëëê ðóóóóóóóóóñóóóóóóóóóò E E D.< autonomous spending induced spending  ,Ð"  >Ñ] œEÐ<Ñ,Ð">Ñ] èëéëê Spending Balance ÊIœ] Ê] œEÐ<Ñ,Ð">Ñ] Ê] œ EÐ<Ñ ",Ð">Ñ +,X  K E D . < Slope of curve: MW œ   ! < ]. ? ? ¹
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Money Market ÊPQ Curve ˆ‰ QQ TT W œ Q T H œ/] 03 Êœ / ] 0 Ð < Ñ Q T / 1 Ê<œ ]  /" Q 00 T / 1 Slope of curve: PQ  ! / 0 ? ? < ] œ ¹ PQ Goods and Money Markets Together ÊEH Curve +,X DK.< ",Ð">Ñ E <œ ]  Q T 1 / Ê] œ +,X DK.
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The Algebra of Aggregate Demand - Economics 200...

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