ECO 1001 Lecture 10: CHAPTER 10 Macroeconomics Models and Fiscal Policy
22 Jan 2019
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Chapter 10 macroeconomics models and fiscal policy: relationships that exist between three different pairs of economic aggregates, income and consumption or saving, the interest rate and investment, changes in spending and output. Personal savings-that part of disposable (after tax) income not consumed: savings (s) =disposable income (di) consumption , 45 degree line- bisects the 90 degree angle formed by the two axes of the graph consumption and disposable. C=di: the consumption schedule: (p 191 table 10. 1, the consumption schedule or function reflects the direct consumption- disposable income relationship suggested in data in figure 10. 1. Spend: reverse wealth effect- in 2008, plunging real estate and stock market prices joined together to erase . 2 trillion of household wealth. Interest rate 7% (i) times loan amount will reduce the. Expected rate of return by the interest or in an example of. /x 7%= if the return on was 10% or the.
