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Unformatted text preview: Capital goods- producer durables: nonconsumable goods that firms use to make other goods -Determinants of planned consumption and planned saving o Real saving and real consumption decisions depend primarily on a households present level of disposable income o Marginal Prosperity to consume and to save The ratio of change in consumption to the change in real disposable income The ratio of the change in savings to the change in real disposable income Marginal versus average prosperities o Average represents total change o Marginal represents total change Relationships o Apc+ Aps= 1 or 100% o Mpc + Mps= 1 or 100%-Det erminants of invest m e nt o The planned invest m ent function- d et er minants Rate of return on invest m ent Interest rates -Multiplier o The ratio of the chang e in the e quilibrium level of real gross do m estic product to t chang e in autono mous real expenditures...
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- Spring '09