The multiplier

1,388 views

Published on

Click Here

http://www.eacademy4u.com/

Online Educational Website For You

Published in: Education, Technology, Business
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
1,388
On SlideShare
0
From Embeds
0
Number of Embeds
4
Actions
Shares
0
Downloads
0
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

The multiplier

  1. 1. The Multiplier
  2. 2. A simplified circular flow of income model
  3. 3. A simplified circular flow of income model Cd
  4. 4. A simplified circular flow of income modelIncomes Cd
  5. 5. A simplified circular flow of income modelIncomes Cd W=S+T+M
  6. 6. A simplified circular flow of income model J=I+G+XIncomes Cd W=S+T+M
  7. 7. The multiplierThe withdrawals and injections approach
  8. 8. W, J The multiplier: (a) a shift in injections W a J1 O Ye1 Y
  9. 9. W, J The multiplier: (a) a shift in injections W b J2 a J1 O Ye1 Ye2 Y
  10. 10. W, J The multiplier: (a) a shift in injections Multiplier = ∆Y / ∆J = ∆Y / ∆W = c− a / b− c W b J2 J2 ∆J a ∆W J1 J1 c O Ye1 ∆Y Ye2 Y
  11. 11. W, J The multiplier: (a) a shift in injections Multiplier = ∆Y / ∆J = ∆Y / ∆W = c− a / b− c = 1/mpw W b J2 J2 ∆J a ∆W J1 J1 c O Ye1 ∆Y Ye2 Y
  12. 12. W, J The multiplier: (b) a shift in withdrawals W1 a J O Ye1 Y
  13. 13. W, J The multiplier: (b) a shift in withdrawals W1 W2 a c J O Ye1 Ye2 Y
  14. 14. W, J The multiplier: (b) a shift in withdrawals Multiplier = ∆Y / ∆W = c −a / a −b W1 W2 a c J ∆W b O Ye1 ∆Y Ye2 Y
  15. 15. The multiplierThe income and expenditure approach
  16. 16. E, W, J The multiplier: a shift in the expenditure curveY E1 O Ye1 Y
  17. 17. E, W, J The multiplier: a shift in the expenditure curveY E 2 E1 O Ye1 Ye2 Y
  18. 18. E, W, J The multiplier: a shift in the expenditure curveY E Multiplier = ∆Y / ∆ J 2 = c− a / b− a E1 c∆Y b ∆J a O Ye1 Ye2 Y
  19. 19. The multiplierThe multiplier and AD / AS analysis
  20. 20. Showing the multiplier effect on the 45o line and AD/AS diagrams Y Cd, W, J E1 O Y Y
  21. 21. Showing the multiplier effect on the 45o line and AD/AS diagrams P AS AD1 O Y Y Cd, W, J E1 O Y Y
  22. 22. Showing the multiplier effect on the 45o line and AD/AS diagrams P AS AD1 O Y Y E2 Cd, W, J E1 O Y Y Y
  23. 23. Showing the multiplier effect on the 45o line and AD/AS diagrams P AS AD1 AD2 O Y Y E2 Cd, W, J E1 O Y Y Y

×