The Spending Multiplier & Marginal Propensities

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AP MACROECONOMICS
SYLLABUS
Walker – Fall Semester -- 2015
Unit 3 – National Income & Price Determination
TUESDAY
October 27
 Test Modules 12-15
 Give the meaning of the aggregate consumption function which shows how current
disposable income affects consumer spending
 Distinguish between autonomous consumption and induced consumption
 Describe & calculate the marginal propensity to consume & the marginal propensity to
save
 Define & understand the usefulness of APC, APS, MPC, MPS
THURSDAY
October 29
 Review the Spending Mulitplier
 Practice with APC, APS, MPC, MPS
 Define the linear equations for the consumption and savings functions
 Practice calculating changes in income, spending, and consumption
 Explain how initial changes in spending lead to further changes in the economy via the
multiplier
MONDAY
November 2
 Review key formulas from Module 16 - QUIZ
 Practice with the multiplier
 Identify the determinants of investment spending
 Analyze the importance of investment spending on the future state of the economy
WEDNESDAY
November 4
 Test Unit III Topic 1 – Basic Macroeconomic Relationships
 Module 17 – Aggregate Demand
FRIDAY
November 6
 More on Aggregate Demand
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