ECO 2013 Lecture Notes - Lecture 15: United States Dollar, Aggregate Demand, Money Supply
Document Summary
Chapter 10 and 12 homework is due sunday october 9th, 2016. Chapter 13th homework is dues the 20th. Exam 2 will be on wednesday october, 12th, 2016. Marginal propensity: marginal propensity of consumption, marginal propensity of saving. Macroeconomic equilibrium occurs where total spending (ae) equals total production (gdp) When an unplanned increase in inventories occurs it means that: actual investment spending > planned investment spending. When an unplanned decrease in inventories occur it means that: actual investment spending < planned investment spending. Because inventory was less than they planned and investment includes inventory, the investment that occurs was less than planned. However, the economy is not always in equilibrium. When ae > gdp, inventories fall, and gdp and total employment increase: pg. When ae < gdp, inventories rise, and gdp and total employment decrease. Chapter 13- aggregate demand and aggregate supply analysis. 13. 1 aggregate demand: aggregate demand and supply model.