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Macro Review Units Unit 3

Macro Review Units Unit 3 - Mrs Presley AP Macroeconomics...

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Mrs. Presley AP Macroeconomics Review Topics and Units IV. Consumption, Saving, Investment, and the Multiplier Consumption and saving Investment The multiplier effect V. Aggregate Demand and Aggregate Supply Aggregate demand Aggregate supply Macroeconomic equilibrium The trade-off between inflation and unemployment Consumption, Saving, Investment and the Multiplier 1. Define the following terms: Consumption Disposable income Saving Autonomous consumption Marginal propensity to consume and formula Marginal propensity to save and formula 2. Identify the Determinants of consumption and saving Wealth Expectations Household debt Taxes and transfer 3. Investment Explain the decision to invest: Interest rate v. expected rate of return Draw the Investment demand graph 4. Loanable funds market Define the Supply of loanable funds Define the Demand for loanable funds Draw a Loanable Funds graph Show a change due to increase in personal savings Show a change due to government borrowing 5. Multipliers
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