Econ103 Discussion03 - 2. Consumption and Investment...

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View Full Document Right Arrow Icon September 10, 2010 Econ 103 — Macroeconomic Principles TA Emilie Bagby 1. Real vs. Nominal GDP (Chapter 4 and Reading 3) - Consumer Price Index (CPI) & GDP Deflator Year # deflator (or index) = Year # current price x 100 Base year price Real GDP = Nominal GDP x 100 GDP Deflator (or index) - GDP per Capita
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Unformatted text preview: 2. Consumption and Investment (Chapter 6 and Reading 3)- Average vs. Marginal Propensity to Consume - Average vs. Marginal Propensity to Save - Consumption Function, Marginal Propensity to Consume and Autonomous Consumption C = C O + C 1 *y d C O = autonomous spending (the amount we would spend if our income was O) C 1 = Marginal Propensity to Consume (MPC) y d = disposable income....
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This note was uploaded on 03/10/2011 for the course ECON 103 taught by Professor Staff during the Spring '08 term at University of Illinois, Urbana Champaign.

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