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Shift of AD - Coggle Diagram
Shift of AD
multiplier effect
multiplier (k) refers to the number of times by which a rise in equilibrium national income exceeds the rise in autonomous expenditure
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AD exceeds current output, firms meet demand by drawing on inventories
unplanned fall in inventories, firms increase output
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workers make use of income to spend on domestic consumer goods and services, causing rise in induced consumption
Ad rise, unplanned fall in inventories
new income created for those employed, increase in country's income level, increase consumption expenditure for G&S
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