ECO102H1 Lecture 33: Lecture 33-Shifts in Aggregate Supply Curve

The multiplier effect refers to the series of:

a. Autonomous increases in consumption spending that result from an initial increase in induced expenditures.

b. Induced increases in consumption spending that result from an initial increase in autonomous expenditures.

c. Autonomous increases in investment spending that result from an initial increase in induced expenditures.

d. Induced increases in investment spending that result from an initial increase in autonomous expenditures.

Aggregate expenditure is the total amount of spending in the economy that determines the level of the GDP. Components of aggregate expenditure are autonomous expenditure, planned private investments, government expenditure, and net exports. When autonomous expenditure increases or decreases, it has a multiplier effect on the GDP.

Referring to the 10-year historical period that you chose for your final project, discuss an example of a change in autonomous spending. Research a government policy implemented during that time and discuss the multiplier effect it had on the economy.

I have chosen 1980-1989 in the US.

Aggregate expenditure is the total amount of spending in the economy that determines the level of the GDP. Components of aggregate expenditure are autonomous expenditure, planned private investments, government expenditure, and net exports. When autonomous expenditure increases or decreases, it has a multiplied effect on the GDP.

Referring to the 10-year historical period that you chose for your final project,( i choose Korean War and Vietnam War.). discuss an example of a change in autonomous spending. Research a government policy implemented during that time and discuss the multiplier effect it had on the economy.