Limited time offer 20% OFF StudySoup Subscription details

UT - ECON 213 - Class Notes - Week 8

Created by: Simone Harford Elite Notetaker

> > > > UT - ECON 213 - Class Notes - Week 8

UT - ECON 213 - Class Notes - Week 8

This preview shows pages 1 - 2 of a 4 page document. to view the rest of the content

This is the end of the preview. Please to view the rest of the content
Join more than 18,000+ college students at University of Tennessee - Knoxville who use StudySoup to get ahead
School: University of Tennessee - Knoxville
Department: OTHER
Course: Principles of Macroeconomics
Professor: Ken Baker
Term: Fall 2017
Tags: Macroeconomics
Name: Macroeconomics Notes
Description: These notes cover class material!
Uploaded: 03/12/2018
4 Pages 37 Views 29 Unlocks
  • Better Grades Guarantee
  • 24/7 Homework help
  • Notes, Study Guides, Flashcards + More!

Unformatted text preview: amily ourpurode F Gro 2010 Kole of government promoting ccano mic youth: Contri louting to physical caprtal Enforcing contracts ,protecting property nights Unit 2: Chapter 8 : Aggregate Expenditures Macroeconomics before After John M. Keynes The classic economic model : The Great Depression & John M.K. Prior to 1130, mainstream The Great Depression economic thought argued that : ||downturn sexiously challenged this prolonged The Laissez-faire Cicare it Perspective alone) approach was the best *Challenged many of the classical approach for the economy ideals & forever split macroeconomia I. The econany was into liffuent camps A study sosAggugate Expenditura com Equililorum EquiorumE = Y = c + * Sole for occurs when incorno AE c = 1000 + 374 Y first, then consumption, then savings AE Caggregate expenditures) - CA Cincone& production) F CA S DAA equilibrium: Cincome/production supply EAE (C loc demand Multiplex Effect Occurs when an initial amount of spending causes income to Do by = AE wuripler I - MPC The AE m iriplier You can find the MPO di cechy in our HE Formulo AE = CALCO AE . poo + 24 + 10 Slope of the consumption function is vec Wien MPa 0.75 = C1-0.15)=1/25 4 - The potential increase in income from a spending is $ 1co y 4 = 400 loo incease in Saving will also increase by Sluo Cyst Moo) Satyafull Aggregate Expendirures Model Hys, government Government has 2 componeres Gond Gout, spendira E Taxes Cmones dover anere collects) 7 both autonomous from wncorra Cdort depend od income To balance, G T Goua runs a balanced budget collects T in taxes & sponds G. we add , and subtract mm Let G = STOD Let a Soo (wat be included wil te combination function old 1000 3/4 New C- 11000 1 34 CY-T known as Disposable wocowe Our new model Cincome / pyodu chop = C++ (1 = AE in equilibrium) Taxes haue less direct impact on income thain an tquivalent change in gov'spending because some of an tax is paid using Savings, both of which are worth drausis Two Multipliers Q: How does the 100 G spending increase y by 9400 & the 4100 T decrease y by $300 ? A The ore Octually 2 multipliers from our AE model The AE multiplier = CVCI - Mp The tax poultipliers VAE mu vpliec ex suppose MPC = 8 AE =(/1-) - .25 Even s o morease in Or will result in occasing but Tax = -5 -4 Even s 100 mcrease in Twill result in Y decreasing by $400 studySoup

Join StudySoup for FREE
Get Full Access to UT - ECON 213 - Class Notes - Week 8
Join with Email
Already have an account? Login here
×
Log in to StudySoup
Get Full Access to UT - ECON 213 - Class Notes - Week 8

Forgot password? Reset password here

Reset your password

I don't want to reset my password

Need help? Contact support

Need an Account? Is not associated with an account
Sign up
We're here to help

Having trouble accessing your account? Let us help you, contact support at +1(510) 944-1054 or support@studysoup.com

Got it, thanks!
Password Reset Request Sent An email has been sent to the email address associated to your account. Follow the link in the email to reset your password. If you're having trouble finding our email please check your spam folder
Got it, thanks!
Already have an Account? Is already in use
Log in
Incorrect Password The password used to log in with this account is incorrect
Try Again

Forgot password? Reset it here