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TWO SECTOR

Household (C) &


Firm (I)

Equilibrium App:
AS=AD
Y = C+ I
Injection=Leakage
I=S
MPC = 1 - MPS

MPC + MPS = 1

APC + APS = 1

C = a + bYd

S = -a + (1 – b)Yd
FOUR SECTOR THREE SECTOR
K= 1 Household(C)
Household(C) 1 – MPC ,Firm(I),
,Firm(I), Government(G)
MPC=∆C/∆Y
Government(G)
MPS=∆S/∆Y
& Foreign(X-M) Equilibrium App:
AS=AD
Equilibrium App:
Y = C1 + I + G
AS=AD
Y = C1 + I + G + X - M
Injection=Leakage
I + G = S1 + T
Injection=Leakage
I + G + X = S1 + T + M

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