Textbook Notes (227,042)
US (70,108)
LSU (540)
ECON (75)
ECON 2010 (42)
All (9)
Chapter 11

Chapter 11 Econ (98% on the test)

by OneClass281606 , Fall 2013
5 Pages
Fall 2013

Course Code
ECON 2010

This preview shows pages 1-2. Sign up to view the full 5 pages of the document.
Chapter 11 (11.1,11.2,11.4) 03/10/2012
Aggregate Expenditure
Amount of money spent throughout the entire economy.
AE = C + I + G + Nx
Investment refers to planned investment
Changes in Inventories
If AE = GDP, we have no unplanned changes
Macroeconomic Equilibrium
State the economy tends to move towards
Most boring state
Disposable Income
The more money you’re making, the more you are going to spend
Household Wealth
If you feel richer you are going to spend more money
Expected Future Income
Expections of how much you are going to make in the future
Price level/Interest Rate
If the interest rates are low it is much easier to do.
In a sense, you are borrowing money from your future self.
Marginal Propencity to Consume
If you get a raise in Disposable income, how much more will you spend.
Difficult to calculate.
If people gain an extra dollar, they are likely to spend 90 cents of it in the U.S.
Consumption Savings
GDP Growth
If we want as high as income as possible we need to consume.
Consumption can take the place of some investment money.
Cash Flow
The income stream for firms
Is used to pay normal, day to day, business expenses.
Tends to be positive.
Many financial markets overestimate a firms cash flow.
In a recession you want people to spend more money in order to maintain the cash flow.
Net Exports
Influenced by relative production between countries
Relative Growth Rates
Exchange Rates
Price Levels
Multiplier Effect
Multiplier = 1/1-MPC (Marginal Propensity to Consume)
Gives you how much money is spent in the economy.
This is the argument for increase in minimum wage laws
Argument in favor of big social welfare programs
Paradox of Thrift

Loved by over 2.2 million students

Over 90% improved by at least one letter grade.

Leah — University of Toronto

OneClass has been such a huge help in my studies at UofT especially since I am a transfer student. OneClass is the study buddy I never had before and definitely gives me the extra push to get from a B to an A!

Leah — University of Toronto
Saarim — University of Michigan

Balancing social life With academics can be difficult, that is why I'm so glad that OneClass is out there where I can find the top notes for all of my classes. Now I can be the all-star student I want to be.

Saarim — University of Michigan
Jenna — University of Wisconsin

As a college student living on a college budget, I love how easy it is to earn gift cards just by submitting my notes.

Jenna — University of Wisconsin
Anne — University of California

OneClass has allowed me to catch up with my most difficult course! #lifesaver

Anne — University of California
More Less
Unlock Document

Only pages 1-2 are available for preview. Some parts have been intentionally blurred.

Unlock Document
You're Reading a Preview

Unlock to view full version

Unlock Document

You've reached the limit of 4 previews this month

Create an account for unlimited previews.

Already have an account?

Log In


Don't have an account?

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.