MGEA06H3 Chapter : Week 3 chapter notes
3 Dec 2010
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MGEA06H3 Full Course Notes
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Chapter 21 the simplest short-run macro model notes. N desired aggregate expenditure (ae) the sum of desired or planned spending on domestic output by households, firms, governments, and foreigners. N ae = c + i + g + (x im) N apc = c / yd = consumption / disposable income. N marginal propensity to consume (mpc) the change in desired consumption divided by the change in disposable income that brought it about average propensity to save (aps) desired saving divided by disposable income. N mpc = c / yd = change in consumption / change in disposable income. N aps = s / yd = savings / disposable income. N marginal propensity to save (mps) change in desired saving divided by the change in disposable income that brought it about. N mps = s / yd = change in saving / change in disposable income.
