Chapter 9
I. Personal Consumption expenditures
A. Consumption
+savings = (disposable) income
B. The
consumption schedule
C. The
saving schedule
D. APC and
APS
E. MPC
and MPS
F. non-income
determinants of C and S
II. Investment Expenditures
A. Determinants
of investment spending
B. Investment
Demand Curve
C. Instability
of investment
D. Shifts
in the investment Demand curve
III. Building the Aggregate Expenditures Model
A. Equilibrium
GDP
1. consumption
2. investment
3. aggregate expenditures
4. equilibrium GDP
a. adjustments to equilibrium
Chapter 10
I. Aggregate Expenditures: The Multiplier, Net Exports,
and Government
A. The multiplier
1. Example in notes
2. The multiplier effect
3. Calculating the multiplier
a. formulas
4. why the multiplier is important or significant to policy makers
B. Net Exports
(Parts also from chapters 6, 20 and 21)
1. Reasons for trade
a. Specialization
b. Comparative Advantage
2. Free Trade versus Trade Barriers arguments
3. Exchange Rates
a. Fixed Exchange Rates
b. Flexible or Floating Exchange Rates
c. Managed Float
4. How exchange rates effect the levels of imports and exports
a. appreciation/depreciation of the dollar
5. net exports and the AE model
C. Government
Expenditures
1. Effects on equilibrium GDP in the AE model
2. Taxes
a. MPC
b. effect on equilib. GDP
3. Policy involving both Gov. spending and taxes
a. balanced budget multiplier
D. Recessionary
and Inflationary gaps
Chapter 11
I. Aggregate Demand and Supply
A. the Aggregate
Demand schedule
1. definition
2. reasons why the AD schedule slopes down
a. wealth effect
b. interest rate effect
c. foreign purchases effect
3. deriving the AD curve from the AE model
4. shifts in the AE schedule and the AD curve
5. changes in AD
B. the Aggregate
Supply schedule
1. definition
2. the horizontal range
3. the intermediate range
4. the vertical range
5. changes in aggregate supply
C. Equilibrium
in the economy
1. the horizontal range
2. the intermediate range
3. the vertical range
4. the multiplier with price level changes
5. changes in AS
6. the ratchet effect