11.18.10 - • Nonincome Determinants of Consumption and...

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11.18.2010 Basic Macroeconomic Relationships The Income-Consumption and Income-Saving Relationships 45degree line – C=DI (consumption = disposable income) Break-Even Income The Consumption Schedule The Saving Schedule Average and Marginal Propensities APC (average propensity to consume) and APS (average propensity to save) Consumption / Income = APC Saving / Income = APS MPC (Marginal propensity to consume) and MPS (marginal propensity to save) MPC = change in consumption / change in income MPS = change in save / change in income MPC and MPS as Slopes
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Unformatted text preview: • Nonincome Determinants of Consumption and Saving ⌐ Wealth ⌐ Borrowing ⌐ Expectations ⌐ Real interest rates • Other Important Considerations ⌐ Switch to real GDP ⌐ Changes along schedules ⌐ Schedule shifts ⌐ Taxation ⌐ Stability The Interest-Rate-Investment Relationship • Expected Rate of Return • The Real Interest Rate • Investment Demand Curve • Shifts of the Investment Demand Curve ⌐ Acquisition, Maintenance, and Operating Costs ⌐ Business Taxes ⌐ Technological Change...
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This note was uploaded on 11/21/2010 for the course ECON 101 taught by Professor M.h.baligh during the Fall '09 term at Bergen Community College.

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