macro economics chapterb.pptVIP

Chapter 6B Aggregate expenditures model and multipliersPart II Changes in equilibrium GDP GDP is seldom stable. It is characterised by cyclical fluctuations Changes in investment schedule or the savings-consumption schedule will lead to changes in equilibrium GDP Investment expenditures are generally less stable due to changes in the expected rate of net profit Autonomous expenditure changes Shifts in the AE curve due to changes in autonomous expenditure Result in new equilibrium levels of output (GDP) How much output changes by depends on the size of the expenditure multiplier Expendi