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(Multiplier Effect (Actual :heavy_minus_sign: (Imports, Taxes, Inflation),…
Multiplier Effect
:small_red_triangle: GDP = Multiplier x :small_red_triangle: AE
Facts
Circular Flow
Ripple
DI :small_red_triangle:
C :small_red_triangle:
S :small_red_triangle:
Actual :heavy_minus_sign:
Imports
Taxes
Inflation
Multiplier Effect
#
Interconnections
Reasons
Xn
G
Ig :star:
C
Magnitude
(1/1-MPC)
Direct
1/MPS
Inverse
Example
631
Questions
Ripple
How do imports affect consumption?
Can't we raise both AE and Equ'm GDP
Open Up!
Imports
AE -
Exports
AE +
Xn
Expansionary
Contractionary
Independent
Int'l Economy :check: ?
Prosperity
Exchange Rates
Tariffs
