经济学原理4

1 *$1,000 1 2 / 3
1+r+r2+r3+…+rn+…=1/(1-r)
The multiplier:3
MPC holds constant, the increase of investment: ∆I
Income increases: ∆I
Income increases: ∆I *b Income increases: ∆I *b2 Income increases: ∆I *b3
Total spending
I
C
Point QE is the equilibrium output. QE
GDP
2) The influence of Taxes
consumption
45° C+I+G (C+I+G)’
DI=GDP-T T DI consumption
(if G and I holding constant) Employment, GDP
the multiplier is 3.
Total spending
(AD)
Equilibrium point E’
G
45° C+I C
F
M ∆I E N
I 0
QE
Q’ ∆Y
QE’
GDP(AS)
3) The multiplier model in perspective

The multiplier model leaves many macroeconomic factors out of the picture (such as monetary factors affecting interest rates…) The model shows how AD which influenced by investment and consumption spending determines GDP in a short run. The model works when there are unemployed resources, that is, when output is less than the potential output.
∆Y

From the figure: if the investment curve changes from I to I’ ( ∆I ) , the MPC
being 2/3(so the MPS is 1/3), and the
increased output (∆Y) will be 3 ∆I ,and
P
§4.2 The Multiplier Model

1. Determination of the equilibrium national output under the simple economy
1) Output determination with saving and investment (saving-investment balance way) 2) output determination by consumption and investment (consumption-plus-investment way)
* Deduction of the equilibrium determined by the equivalence of the
total income and expenditure
C=C (Yd)
I=Ia
Y=C+I C=Ca+bYd
Ye=Ca+bYe+Ia
1 Ye= 1 b (Ca+Ia)
2. Fiscal-Policy Multiplier
1) Government Expenditure Multiplier
Definition: The increase in GDP resulting from an increase of $1 in government purchases of goods and services.
2. Aggregate Curve and it’s shifts
1) Aggregate curve’s characteristic: download sloping from the upper left to the lower right. main reason: money-supply effect
GDP
Example
3) The arithmetic of equilibrium national output under the closed economy
C=Ca +b· (Y-T+TR) I=Ia
G=Ga
Y=C+I+G
Y=Ca+ b · (Y-T+TR) +Ia+ Ga
1 Ye= TR)] 1 b [Ca +Ia + Ga –(bT -b·
* Deduction of the equilibrium output determined by saving and investment
S=S (Yd) I=Ia
S=I
S=-Ca+(1-b)Yd
-Ca+(1-b)Yd=Ia
1 Ye= 1 b (Ca+Ia)
B:MPC
2) Output determination by consumption and investment
Analysis of the process of the multiplier in arithmetic Analysis of the process of the multiplier in graphic The multiplier model in perspective


1) Analysis of the process of the multiplier in arithmetic

Woodsheds and carpenters
$1,000 + $666.67 + $444.44 + $296.30 + $197.53 + … $3,000 1*$1,000 + (2/3)*$1,000 + (2/3)2*$1,000 + (2/3)3*1,000 + (2/3)4*1,000 + …
Chapter 4
Aggregate Demand and the Multiplier Model
§ 4.1 Foundations of Aggregate Demand
1. The conception and components of Aggregate Demand
1) Aggregate Demand (AD) total or aggregate quantity of output that is
3,300
3,000 2,700
3,200
3,000 2,800
100
0 -100
200
200 200
3,300<
3,000< 3,000
expansion
expansion expansion
2. The principle of the Multiplier

2) The movements or shifts of the AD curve
Movements along the AD curve
P
PA PB
A
B
AD
QA QB
0
Q
Shifts of AD curve
Monetary policy Policy variables Fiscal policy Foreign output Exogenous variables Asset values Advances in technology other AD AD’ Q
b:MPC
GDP determination where output equals planed spending
(1) (2) (3) (4) Levels Planed Planed Planed of GDP consumption saving investment and DI 4,200 3,900 3,600 3,800 3,600 3,400 400 300 200 200 200 200 (5) (6) (7) level total spending resulting of consumption tendency GDP and investment of output 4,200> 3,900> 3,600= 4,000 3,800 3,600 contraction contraction equilibrium
1) Output determination with saving and investment
I ·S
S2
Equilibrium point S E I
The equilibrium level of GDP is just at the
point E which means
0 S1
GDP the desired saving and M Equilibrium output investment are equal.


§4.3 Fiscal Policy in the Multiplier Model 1.Determination of National Output in a Closed Economy 2. Fiscal-policy Multiplier *3. Intrinsic tool for stability