Chapter 24

National Output Determines the Levels of Consumption and Saving

The Equilibrium Level of National Output
Is Determined by Intersection of Saving
and Investment Schedules

In the Expenditure Approach, Equilibrium GDP Level Is Found at the Intersection
of the C + I Schedule with the 45º Line

Each Dollar of Investment Is “Multiplied” into 3 Dollars of Output

How the Multiplier Model Fits
the AS-AD Approach

Taxes Reduce Disposable Income and Shift CC Schedule to the Right and Down

Government Purchases Add On Just like Investment to Determine Equilibrium GDP

The Effect of Higher G on Output

Output during Wartime

Expenditure Multipliers
in Macroeconomic Models