PCM
ECON 2301 MACROECONOMICS
Chapter 10
Below you will find the learning objective, concept, idea, term,
or theory that each question on the exam will cover. The numbers in the list
refer to the question number on Exam 3 that will test your knowledge of that
specific learning objective. Each of these topics/learning objectives is
discussed in the textbook in the order that they are listed below. A much better understanding can often be attained by
working through the "active graphs" and "smart graphs"
connected to many of these objectives in the online material.
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After reading Chapter 10, you should be able to:
- Illustrate the income–expenditure model and identify points
and curves in that illustration. (Section 10.2)
- Define and distinguish between induced spending and autonomous
spending and explain how income, consumption, and saving are
related. (Section 10.2)
- Define and show graphically the marginal propensity to consume
and the marginal propensity to save. (Section 10.2)
- Explain the adjustment process to an expenditure equilibrium and
how inventories play a role in it. (Section 10.2)
- Describe how new autonomous spending can have a ripple effect throughout
the economy. (Section 10.3)
- Calculate numerical examples of the multiplier effect and
explain how it can magnify the effects of the Paradox of Thrift (Snapshot
10.3) changes in Consumer Confidence (Snapshot
10.2). (Section 10.3)
- Illustrate inflationary and recessionary gaps on the
income-expenditures model. (Section 10.3)
- Distinguish the regular multiplier from the tax multiplier and the balanced-budget
multiplier. (Section 10.3)
- Graph the relationship of the income–expenditure model to
aggregate demand. (Section 10.4)
- Compare economic analyses of the Great Depression. (Section
10.5)
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