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Saving function - PowerPoint PPT Presentation

Chapter 3

Chapter 3. Determination of Equilibrium National Income. BUSINESS CYCLE. Aggregate Econ. Activity. (% ? in real GDP). Boom/Inflation. Potential Growth Path. Actual Growth Path. Trough/Depression/Slump/Unemployment. years. NATIONAL INCOME EQUILIBRIUM.

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Consumption Function

Chapter 5. Consumption Function. Consumption/Saving Function. 1. Significance. AD and AS determine Y, u and P. Consumption is the major component of AD Saving is inevitable for investment which increases both AD and AS. 2. What is Consumption ?. Non-durable goods : fairly stable.

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ECN 202: Principles of Macroeconomics Nusrat Jahan Lecture-9

ECN 202: Principles of Macroeconomics Nusrat Jahan Lecture-9. Aggregate Demand and Aggregate Supply. There is a very close relationship between Income, Consumption and Saving. Saving = Income-Consumption

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Draw the consumption function: C = 150 + 0.8Y D

Draw the consumption function: C = 150 + 0.8Y D Draw the consumption function: C = 150 + 0.8Y D At what level of income do households begin to save? By how much does consumption increase when income rises 200? 750 By 160 to 910 If the consumption function is: C = 200 + 0.9Y D

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3.47k views • 9 slides

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Saving function - PowerPoint PPT Presentation

Chapter 3

Consumption Function

ECN 202: Principles of Macroeconomics Nusrat Jahan Lecture-9

Draw the consumption function: C = 150 + 0.8Y D