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    AP Macro Econ Notes

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    willjyw0201
    1) The document discusses key economic concepts like the spending multiplier, tax multiplier, and different effects that impact aggregate demand such as the wealth effect, interest rate effect, and net export effect. 2) It explains the spending multiplier as how much total spending increases from an additional $1 increase in spending, and the tax multiplier which is always one less than the spending multiplier. 3) Several topics are covered in the later sections like the relationship between price levels and aggregate demand, and the differences between nominal and real interest rates.

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    AP Macro Econ Notes

    Uploaded by

    willjyw0201
    5 views31 pages
    1) The document discusses key economic concepts like the spending multiplier, tax multiplier, and different effects that impact aggregate demand such as the wealth effect, interest rate effect, and net export effect. 2) It explains the spending multiplier as how much total spending increases from an additional $1 increase in spending, and the tax multiplier which is always one less than the spending multiplier. 3) Several topics are covered in the later sections like the relationship between price levels and aggregate demand, and the differences between nominal and real interest rates.

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    1) The document discusses key economic concepts like the spending multiplier, tax multiplier, and different effects that impact aggregate demand such as the wealth effect, interest rate effect, and net export effect. 2) It explains the spending multiplier as how much total spending increases from an additional $1 increase in spending, and the tax multiplier which is always one less than the spending multiplier. 3) Several topics are covered in the later sections like the relationship between price levels and aggregate demand, and the differences between nominal and real interest rates.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pdf or txt
    5 views31 pages

    AP Macro Econ Notes

    Uploaded by

    willjyw0201
    1) The document discusses key economic concepts like the spending multiplier, tax multiplier, and different effects that impact aggregate demand such as the wealth effect, interest rate effect, and net export effect. 2) It explains the spending multiplier as how much total spending increases from an additional $1 increase in spending, and the tax multiplier which is always one less than the spending multiplier. 3) Several topics are covered in the later sections like the relationship between price levels and aggregate demand, and the differences between nominal and real interest rates.

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    of 31

    Unit 3 Module 16-20

    16 (3 2 ,
    3
    ,
    .
    17

    Multiplier
    ↳ Spendings
    - Jupon-1 & .

    Injections US-higher
    Marginal propensity to Consume

    of each + dollar
    - How much you spend
    MPS
    saved per additional dollar
    mpSempc =1

    Spending Multipher

    Fic or i
    ps

    Tox
    Multiplier -always one less than
    spending multipler
    Balanced Budget -
    For every dollar you spend must receive
    , you
    Multiplier -> e dollar

    17 Price Aggregate Demand


    Level Cull you's
    +S)
    ↳ Wealth Effect ↳ CSS TIS+ Ne
    Price Real Incomet CSGBDN

    * 2 . Interest Rute Effect


    IRN D-money ↑ CSCsome IN

    . Net Export Effect


    3

    Import Ext nEd GrPX AD

    Real GDP
    Price of
    previously issued
    bonis has inese recationship w/ interest Rate

    Read Mudad

    Nominal
    ->
    vs Real Interest Rates
    ↳ Roul Rate of Return

    NIR=RER-inflation

    Expected US Actual Inflation

    UnexpectedInflation -
    ROR fulls

    Asset Vale falls


    Fixed interest Rate - VER constant FIR
    , changes

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