Submit Search
Upload
Chapter 12 - Spending by Individuals,.ppt
•
Download as PPT, PDF
•
0 likes
•
1 view
Muhammad Tariq
Follow
SPENDING AND INVESTMENT
Read less
Read more
Economy & Finance
Report
Share
Report
Share
1 of 25
Download now
Recommended
Chapter 11 - Measuring Macroeconomic Activity.ppt
Chapter 11 - Measuring Macroeconomic Activity.ppt
Muhammad Tariq
Ppt econ 9e_one_click_ch21
Ppt econ 9e_one_click_ch21
Muhammad Attique Shah
483159831-gdp-ppt.ppt
483159831-gdp-ppt.ppt
GetachewGurmu
20959913 crecimiento-economico-y-pib
20959913 crecimiento-economico-y-pib
will89
Session number 03 (1).ppt
Session number 03 (1).ppt
Hashan S. Wimalasiri
national income accounting
national income accounting
Ruchi reddy
NATIONAL INCOME by Dr TSERING LAMCHUNG
NATIONAL INCOME by Dr TSERING LAMCHUNG
ketholelie mere
Ch05 7e
Ch05 7e
Mariam Ahmad
Recommended
Chapter 11 - Measuring Macroeconomic Activity.ppt
Chapter 11 - Measuring Macroeconomic Activity.ppt
Muhammad Tariq
Ppt econ 9e_one_click_ch21
Ppt econ 9e_one_click_ch21
Muhammad Attique Shah
483159831-gdp-ppt.ppt
483159831-gdp-ppt.ppt
GetachewGurmu
20959913 crecimiento-economico-y-pib
20959913 crecimiento-economico-y-pib
will89
Session number 03 (1).ppt
Session number 03 (1).ppt
Hashan S. Wimalasiri
national income accounting
national income accounting
Ruchi reddy
NATIONAL INCOME by Dr TSERING LAMCHUNG
NATIONAL INCOME by Dr TSERING LAMCHUNG
ketholelie mere
Ch05 7e
Ch05 7e
Mariam Ahmad
Ou cde eep_1
Ou cde eep_1
Neelakantam Tatikonda
Chap9
Chap9
Shu Shin
Chap9
Chap9
Shu Shin
Economics 7
Economics 7
Golam Bitonsir
National income final
National income final
Snehashis Bera
Economics c03l03-gdp
Economics c03l03-gdp
MBA @ Faculty of Entrepreneurship
Gross Domestic Product
Gross Domestic Product
toconnor127
Macro economics & and Policymarketingchapter 1-ni
Macro economics & and Policymarketingchapter 1-ni
Deepak Dhakal
National income
National income
Md Shaifullar Rabbi
economic principles
economic principles
papi0898
Clil aggregate demand
Clil aggregate demand
paola barone
ICAI Economics for finance revision capsule.pdf
ICAI Economics for finance revision capsule.pdf
SamarthPandya5
Gross Domestic Product (PDB)
Gross Domestic Product (PDB)
Airlangga University , Indonesia
J)o aUtuxoa- q,rr{fAsl4 #S-CHAPTER 12 Spending by lndivi.docx
J)o aUtuxoa- q,rr{fAsl4 #S-CHAPTER 12 Spending by lndivi.docx
priestmanmable
Chapter 2
Chapter 2
Kusters Engineering India Pvt Ltd, Indian subsidiary of Royal Dutch Kusters Engineering BV
National Income Accounting
National Income Accounting
Mazria Yuji
B-COM part 1 Regular 2015
B-COM part 1 Regular 2015
Khalid Aziz
Chapter 2.ppt of macroeconomics by mankiw 9th edition
Chapter 2.ppt of macroeconomics by mankiw 9th edition
MuhammadHusnain82237
PPT MACRO.ppt
PPT MACRO.ppt
DionSantiago1
GDP_PPoint.ppt
GDP_PPoint.ppt
HiraBano
Best VIP Call Girls Noida Sector 18 Call Me: 8448380779
Best VIP Call Girls Noida Sector 18 Call Me: 8448380779
Delhi Call girls
The Economic History of the U.S. Lecture 17.pdf
The Economic History of the U.S. Lecture 17.pdf
Gale Pooley
More Related Content
Similar to Chapter 12 - Spending by Individuals,.ppt
Ou cde eep_1
Ou cde eep_1
Neelakantam Tatikonda
Chap9
Chap9
Shu Shin
Chap9
Chap9
Shu Shin
Economics 7
Economics 7
Golam Bitonsir
National income final
National income final
Snehashis Bera
Economics c03l03-gdp
Economics c03l03-gdp
MBA @ Faculty of Entrepreneurship
Gross Domestic Product
Gross Domestic Product
toconnor127
Macro economics & and Policymarketingchapter 1-ni
Macro economics & and Policymarketingchapter 1-ni
Deepak Dhakal
National income
National income
Md Shaifullar Rabbi
economic principles
economic principles
papi0898
Clil aggregate demand
Clil aggregate demand
paola barone
ICAI Economics for finance revision capsule.pdf
ICAI Economics for finance revision capsule.pdf
SamarthPandya5
Gross Domestic Product (PDB)
Gross Domestic Product (PDB)
Airlangga University , Indonesia
J)o aUtuxoa- q,rr{fAsl4 #S-CHAPTER 12 Spending by lndivi.docx
J)o aUtuxoa- q,rr{fAsl4 #S-CHAPTER 12 Spending by lndivi.docx
priestmanmable
Chapter 2
Chapter 2
Kusters Engineering India Pvt Ltd, Indian subsidiary of Royal Dutch Kusters Engineering BV
National Income Accounting
National Income Accounting
Mazria Yuji
B-COM part 1 Regular 2015
B-COM part 1 Regular 2015
Khalid Aziz
Chapter 2.ppt of macroeconomics by mankiw 9th edition
Chapter 2.ppt of macroeconomics by mankiw 9th edition
MuhammadHusnain82237
PPT MACRO.ppt
PPT MACRO.ppt
DionSantiago1
GDP_PPoint.ppt
GDP_PPoint.ppt
HiraBano
Similar to Chapter 12 - Spending by Individuals,.ppt
(20)
Ou cde eep_1
Ou cde eep_1
Chap9
Chap9
Chap9
Chap9
Economics 7
Economics 7
National income final
National income final
Economics c03l03-gdp
Economics c03l03-gdp
Gross Domestic Product
Gross Domestic Product
Macro economics & and Policymarketingchapter 1-ni
Macro economics & and Policymarketingchapter 1-ni
National income
National income
economic principles
economic principles
Clil aggregate demand
Clil aggregate demand
ICAI Economics for finance revision capsule.pdf
ICAI Economics for finance revision capsule.pdf
Gross Domestic Product (PDB)
Gross Domestic Product (PDB)
J)o aUtuxoa- q,rr{fAsl4 #S-CHAPTER 12 Spending by lndivi.docx
J)o aUtuxoa- q,rr{fAsl4 #S-CHAPTER 12 Spending by lndivi.docx
Chapter 2
Chapter 2
National Income Accounting
National Income Accounting
B-COM part 1 Regular 2015
B-COM part 1 Regular 2015
Chapter 2.ppt of macroeconomics by mankiw 9th edition
Chapter 2.ppt of macroeconomics by mankiw 9th edition
PPT MACRO.ppt
PPT MACRO.ppt
GDP_PPoint.ppt
GDP_PPoint.ppt
Recently uploaded
Best VIP Call Girls Noida Sector 18 Call Me: 8448380779
Best VIP Call Girls Noida Sector 18 Call Me: 8448380779
Delhi Call girls
The Economic History of the U.S. Lecture 17.pdf
The Economic History of the U.S. Lecture 17.pdf
Gale Pooley
Call Girls Service Nagpur Maya Call 7001035870 Meet With Nagpur Escorts
Call Girls Service Nagpur Maya Call 7001035870 Meet With Nagpur Escorts
ranjana rawat
03_Emmanuel Ndiaye_Degroof Petercam.pptx
03_Emmanuel Ndiaye_Degroof Petercam.pptx
FinTech Belgium
Monthly Market Risk Update: April 2024 [SlideShare]
Monthly Market Risk Update: April 2024 [SlideShare]
Commonwealth
The Economic History of the U.S. Lecture 20.pdf
The Economic History of the U.S. Lecture 20.pdf
Gale Pooley
05_Annelore Lenoir_Docbyte_MeetupDora&Cybersecurity.pptx
05_Annelore Lenoir_Docbyte_MeetupDora&Cybersecurity.pptx
FinTech Belgium
02_Fabio Colombo_Accenture_MeetupDora&Cybersecurity.pptx
02_Fabio Colombo_Accenture_MeetupDora&Cybersecurity.pptx
FinTech Belgium
Bladex Earnings Call Presentation 1Q2024
Bladex Earnings Call Presentation 1Q2024
Bladex
The Economic History of the U.S. Lecture 22.pdf
The Economic History of the U.S. Lecture 22.pdf
Gale Pooley
20240417-Calibre-April-2024-Investor-Presentation.pdf
20240417-Calibre-April-2024-Investor-Presentation.pdf
Adnet Communications
Instant Issue Debit Cards - High School Spirit
Instant Issue Debit Cards - High School Spirit
egoetzinger
Q3 2024 Earnings Conference Call and Webcast Slides
Q3 2024 Earnings Conference Call and Webcast Slides
Marketing847413
Booking open Available Pune Call Girls Shivane 6297143586 Call Hot Indian Gi...
Booking open Available Pune Call Girls Shivane 6297143586 Call Hot Indian Gi...
Call Girls in Nagpur High Profile
Malad Call Girl in Services 9892124323 | ₹,4500 With Room Free Delivery
Malad Call Girl in Services 9892124323 | ₹,4500 With Room Free Delivery
Pooja Nehwal
Lundin Gold April 2024 Corporate Presentation v4.pdf
Lundin Gold April 2024 Corporate Presentation v4.pdf
Adnet Communications
Solution Manual for Financial Accounting, 11th Edition by Robert Libby, Patri...
Solution Manual for Financial Accounting, 11th Edition by Robert Libby, Patri...
ssifa0344
Quarter 4- Module 3 Principles of Marketing
Quarter 4- Module 3 Principles of Marketing
MaristelaRamos12
Interimreport1 January–31 March2024 Elo Mutual Pension Insurance Company
Interimreport1 January–31 March2024 Elo Mutual Pension Insurance Company
Työeläkeyhtiö Elo
Instant Issue Debit Cards - School Designs
Instant Issue Debit Cards - School Designs
egoetzinger
Recently uploaded
(20)
Best VIP Call Girls Noida Sector 18 Call Me: 8448380779
Best VIP Call Girls Noida Sector 18 Call Me: 8448380779
The Economic History of the U.S. Lecture 17.pdf
The Economic History of the U.S. Lecture 17.pdf
Call Girls Service Nagpur Maya Call 7001035870 Meet With Nagpur Escorts
Call Girls Service Nagpur Maya Call 7001035870 Meet With Nagpur Escorts
03_Emmanuel Ndiaye_Degroof Petercam.pptx
03_Emmanuel Ndiaye_Degroof Petercam.pptx
Monthly Market Risk Update: April 2024 [SlideShare]
Monthly Market Risk Update: April 2024 [SlideShare]
The Economic History of the U.S. Lecture 20.pdf
The Economic History of the U.S. Lecture 20.pdf
05_Annelore Lenoir_Docbyte_MeetupDora&Cybersecurity.pptx
05_Annelore Lenoir_Docbyte_MeetupDora&Cybersecurity.pptx
02_Fabio Colombo_Accenture_MeetupDora&Cybersecurity.pptx
02_Fabio Colombo_Accenture_MeetupDora&Cybersecurity.pptx
Bladex Earnings Call Presentation 1Q2024
Bladex Earnings Call Presentation 1Q2024
The Economic History of the U.S. Lecture 22.pdf
The Economic History of the U.S. Lecture 22.pdf
20240417-Calibre-April-2024-Investor-Presentation.pdf
20240417-Calibre-April-2024-Investor-Presentation.pdf
Instant Issue Debit Cards - High School Spirit
Instant Issue Debit Cards - High School Spirit
Q3 2024 Earnings Conference Call and Webcast Slides
Q3 2024 Earnings Conference Call and Webcast Slides
Booking open Available Pune Call Girls Shivane 6297143586 Call Hot Indian Gi...
Booking open Available Pune Call Girls Shivane 6297143586 Call Hot Indian Gi...
Malad Call Girl in Services 9892124323 | ₹,4500 With Room Free Delivery
Malad Call Girl in Services 9892124323 | ₹,4500 With Room Free Delivery
Lundin Gold April 2024 Corporate Presentation v4.pdf
Lundin Gold April 2024 Corporate Presentation v4.pdf
Solution Manual for Financial Accounting, 11th Edition by Robert Libby, Patri...
Solution Manual for Financial Accounting, 11th Edition by Robert Libby, Patri...
Quarter 4- Module 3 Principles of Marketing
Quarter 4- Module 3 Principles of Marketing
Interimreport1 January–31 March2024 Elo Mutual Pension Insurance Company
Interimreport1 January–31 March2024 Elo Mutual Pension Insurance Company
Instant Issue Debit Cards - School Designs
Instant Issue Debit Cards - School Designs
Chapter 12 - Spending by Individuals,.ppt
1.
Chapter 12 Spending by
Individuals, Firms, and Governments on Real Goods and Services
2.
Framework for Macroeconomic Analysis
Focus on the Short Run Analysis in Real Versus Nominal Terms Treatment of the Foreign Sector 10/19/2023 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 2
3.
Outline for Macroeconomic Analysis 10/19/2023 Copyright
© 2010 Pearson Education, Inc. Publishing as Prentice Hall 3 Market and Expenditure for Real Goods and Services (Chapter 12) Money Market: Supply and Demand for Money (Chapter 13) Aggregate Supply Curve (Chapter 14) Model of Aggregate Demand and Aggregate Supply (Chapter 14) Aggregate Demand Curve (Chapter 14) Fixed Price Assumption Flexible Price Assumption
4.
Aggregate Expenditure The
sum of personal consumption expenditure, investment expenditure, government expenditure, and net export expenditure in a given period of time. E = C + I + G + (X – M) 10/19/2023 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 4
5.
Personal Consumption Expenditure
The amount of spending by households on durable goods, nondurable goods, and services in a given period of time. 10/19/2023 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 5
6.
Consumption Function The
fundamental relationship in macroeconomics that assumes that household consumption spending depends primarily on the level of disposable income (net of taxes) in the economy, all other variables held constant. C = f(Yd), where Yd = disposable, or after-tax income 10/19/2023 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 6
7.
Marginal Propensity to
Consume (MPC) The additional consumption spending generated by an additional amount of real income, assumed to take a value less than 1. MPC = ΔC/ΔYd or ΔC/Δ(Y - TP) 10/19/2023 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 7
8.
Saving Function The
amount of disposable income that households do not spend on the consumption of goods and services. S = Yd - C 10/19/2023 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 8
9.
Marginal Propensity to
Save (MPS) The additional household saving generated by an additional amount of real income, which equals 1 MPC. MPS = ΔS/ΔYd or ΔS/Δ(Y – TP) = 1 - MPC 10/19/2023 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 9
10.
Other Factors Affecting
the Level of Consumption Spending Personal taxes Real interest rate Consumer confidence Existing stock of wealth Availability of consumer credit Stock of consumer debt outstanding 10/19/2023 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 10
11.
Consumption Function -
Graphical 10/19/2023 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 11 C Y C0 C2 C1 Y2 Y1 ∆C ∆Y
12.
Gross Private Domestic
Investment Expenditure The total amount of spending on nonresidential structures, equipment, and software; residential structures; and business inventories in a given period of time. 10/19/2023 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 12
13.
Determinants of Gross
Private Domestic Investment Level of real income and output in the economy Real interest rates Business taxes Expected Profits and Business Confidence Capacity utilization rates Residential Investment Spending Inventory Investment 10/19/2023 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 13
14.
Government Expenditure The
total amount of spending by federal, state, and local governments on consumption outlays for goods and services, depreciation charges for existing structures and equipment, and investment capital outlays for newly acquired structures and equipment in a given period of time. 10/19/2023 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 14
15.
Determinants of the
Level of Government Expenditures Government expenditure policy is determined by the legislative and executive institutions at all levels of government. 10/19/2023 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 15
16.
Net Export Expenditure
The difference between export spending on domestically produced goods and services by individuals in other countries and import spending on foreign produced goods and services by domestic residents in a given period of time. 10/19/2023 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 16
17.
Determinants of the
Level of Net Export Expenditures Relative economic growth rates around the world. Currency exchange rates. Relative interest rates. 10/19/2023 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 17
18.
Aggregate Expenditure Function 10/19/2023 Copyright
© 2010 Pearson Education, Inc. Publishing as Prentice Hall 18 E = E0 + (c1 + i1 - m1)Y where E = aggregate expenditure E0 = sum of all autonomous expenditure components c1 = marginal propensity to consume i1 = marginal propensity to invest m1 = marginal propensity to import Y = real income
19.
Aggregate Expenditure Function
– Graphical Treatment 10/19/2023 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 19 E Y E E0 Slope = c1 + i1 – m1
20.
Equilibrium Level of
Income and Output The equilibrium level of income and output is that level of income at which the desired spending by all sectors of the economy just equals the value of the aggregate output produced and the income received from that production. E = Y 10/19/2023 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 20
21.
Equilibrium Level of
Income and Output - Graphical 10/19/2023 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 21 E Y E1 E0 EE YE A Slope = c1, assuming i1 = m1 = 0 45o Equilibrium is that level of real income,YE, where the aggregate expenditure line, E1 , crosses the 45° line.
22.
Disequilibrium Level Income
and Output Adjustment Relationship of E to Y Inventories Output Adjustment E > Y Unexpected decrease in inventories Output increases E = Y Inventories are at expected level Output equilibrium E < Y Unexpected increase in inventories Output decreases 10/19/2023 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 22
23.
The Multiplier The
multiple change in income and output that results from a change in autonomous expenditure. m = ∆Y ÷ ∆E = 1 ÷ MPC 10/19/2023 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 23
24.
Interest Rates and
Aggregate Expenditures The interest-related expenditure (IRE) function shows planned consumption and investment spending as a function of the real interest rate, all else held constant. 10/19/2023 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 24
25.
Interest Rates and
Aggregate Expenditures 10/19/2023 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 25 r2 r IRE IRE = f(r) r1 IRE1 IRE2 A B E Y E(r1) E(r2) 45o A B Y1 Y2
Download now