Chapter 3
Spending,
Income, and
Interest Rates
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Figure 3-1 Real GDP Growth
in the United States, 1950–2004
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Figure 3-2 A Simple Hypothesis
Regarding Consumption Behavior
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Figure 3-3 Consumption, Saving,
and Disposable Income, 1929–2004
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Figure 3-4
How Equilibrium Income Is Determined
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Table 3-1 Comparison of the Economy’s
“Always True” and Equilibrium Situations
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Figure 3-5 The Change in Equilibrium
Income Caused by a $500 Billion Increase in
Autonomous Planned Spending
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Figure 3-6
The Payoff
to Investment
for an Airline and
the Economy
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Figure 3-7 Effect on Autonomous Planned
Spending of an Increase in Business and
Consumer Confidence
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Figure 3-8 Relation of the Various Components
of Autonomous Planned Spending to the
Interest Rate
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Figure 3-9 Relation of the IS Curve to the
Demand for Autonomous Spending
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