consumption Flashcards
what does AD =
C + I + G (x-m)
what does everything
C - consumption I - investment G - government spending X - exports M - import
The things that affect consumption
Income tax
Job security
Wealth effect - net worth
Dispobile income
The things that affect investment
Interest rate Coperation tax 19% Low inflation Steady economic growth Law regulations Deferred demand
The things that effect government spemding
Benefits
NHS
Education
Net trade
Trarifts
Exchange rate
Aggreate demand
Total planned level of expenditure on goods and a services in an economy at a given price level
multiplier process formula MPC
Multipler process K = 1 divided by 1 - MPC
multiple process MPW
K= 1 divided by MPW
what is the relationship between saving and consumption
If your saving your not consumption that is the relationship
any changes in price
is SRAS (cost push) LRAS (Aggregate demand)
what cause a shift in the curve
C - consumption I - investment G - government spending X - exports M - import
when there’s a decrease in the exchange rate
you become more competitive
the percentages of the AD
consumption = 60%
investment = 20%
government spending 25%
net trade = -5%
