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Catégorie :Category: nCreator TI-Nspire
Auteur Author: kalistak
Type : Classeur 3.0.1
Page(s) : 1
Taille Size: 3.62 Ko KB
Mis en ligne Uploaded: 22/10/2024 - 03:25:12
Uploadeur Uploader: kalistak (Profil)
Téléchargements Downloads: 7
Visibilité Visibility: Archive publique
Shortlink : https://tipla.net/a4267602
Type : Classeur 3.0.1
Page(s) : 1
Taille Size: 3.62 Ko KB
Mis en ligne Uploaded: 22/10/2024 - 03:25:12
Uploadeur Uploader: kalistak (Profil)
Téléchargements Downloads: 7
Visibilité Visibility: Archive publique
Shortlink : https://tipla.net/a4267602
Description
Fichier Nspire généré sur TI-Planet.org.
Compatible OS 3.0 et ultérieurs.
<<
An Introduction to the Keynesian Multiplier: The multiplier is the ratio of change in real income to the injection that created the change. For example, if the Brazilian government injected an additional 5 billion Brazilian real (BZL) into the economy through government spending and it resulted in an increase in real income of 15 billion BZL, the value of the multiplier would be 3. The multiplier process is based on the idea that one individual's spending is another individual's income. An increase in consumption immediately increases Aggregate Demand (AD). Store owners who have benefited from the extra consumption now have extra income. They spend some of that income on goods/services, and their expenditure on goods/services is now income for the next tier of individuals. Due to successive rounds of spending, the final increase in national income is much larger than the initial injection. The size of the multiplier is dependent on the size of leakages that occur during the process. The higher the leakages, the smaller the multiplier. The initial injection shifts AD to the right. The result of the multiplier process is that there is then a secondary movement of AD to the right which (if the multiplier were 2) may be double the initial movement. The multiplier can also work in reverse when injections are reduced (downward multiplier effect). The Effects of Marginal Propensities on the Multiplier: The 'marginal propensities' refer to the proportion of the next dollar earned that a consumer saves, consumes, is taxed, or spends on imports. Marginal propensities are calculated for economies and provide insights into how each additional dollar of income is allocated. For example, Sweden has a higher tendency to save than the USA, meaning their marginal propensity to save is higher. The USA, therefore, has a greater multiplier on any injections into the Circular Flow. Page 3: An Explanation of the Marginal Propensities Marginal Propensity to Consume (MPC): The proportion of additional income that is spent on consumption (C): MPC = C / Y Marginal Propensity to Save (MPS): The proportion of additional income that is saved (S): MPS = S / Y Marginal Propensity to Tax (MPT): The proportion of additional income that is paid in tax (T): MPT = T / Y Marginal Propensity to Import (MPM): The proportion of additional income that is spent on imports (M): MPM = M / Y Calculating the Multiplier: The value of the multiplier can be calculated in one of two ways: By focusing on the marginal propensity to consume (MPC) By focusing on the withdrawals that occur on each additional dollar of income (MPS + MPT + MPM) 1. Focusing on the MPC: Multiplier = 1 / (1 MPC) 2. Focusing on the Withdrawals: Multiplier = 1 / MPW = 1 / (MPM + MPS + MPT) Page 4: WORKED EXAMPLE: An economy has the marginal propensity to save of 0.15, marginal propensity to tax of 0.20, and a marginal propensity to import of 0.15. a) Calculate the size of the multiplier: Answer: Step 1: Insert the values into the withdrawal formula. Multiplier = 1 / (MPM + MPS + MPT) = 1 / (0.15 + 0.15 + 0.20) = 1 / 0.5 = 2 b) If the government increases their infrastructure spending by £60m, calculate the total increase in GDP, assuming all other things remain equal. Answer: Step 2: Multiply the injection by the multiplier. Impact on GDP = Injection x multiplier = £60m x 2 = £120m Page 5: WORKED EXAMPLE: Calculate the amount of government spending required to restore an economy's macroeconomic equilibrium if the economy faces a $22bn recessionary gap and its MPC is 0.6. Answer: Step 1: Calculate the multiplier. Multiplier = 1 / (1 MPC) = 1 / (1 0.6) = 2.5 [1 mark] Step 2: Calculate the value of government spending required. Government spending required = $22bn / 2.5 = $8.80bn [1 mark] Page 6: Significance of the Multiplier in Shifting Aggregate Demand (AD): The greater the withdrawals, the smaller the value of the multiplier (and vice versa). The greater the MPC, the higher the value of the multiplier (and vice versa). Any change in factors impacting disposable income will change the multiplier. If taxes increase, the value of the multiplier reduces. If interest rates increase, savings increase, consumption decreases, and the multiplier reduces. If exchange rates appreciate, the level of imports increases, and the multiplier decreases. If confidence in the economy increases, consumption increases, and the multiplier increases. It is extremely useful for the government to know the value of the multiplier, as they can use it to judge the likely economic growth caused by increased spending. There is a time lag, as it takes time for the successive rounds of income to work through the economy. EXAM TIP: The final bullet point mentions time lags. This is an excellent point to include in any evaluation on the effectiveness of the multiplier. It may take up to 18 months for the full multiplier effect to be seen, and any change to consumer confidence during this period will impa
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Compatible OS 3.0 et ultérieurs.
<<
An Introduction to the Keynesian Multiplier: The multiplier is the ratio of change in real income to the injection that created the change. For example, if the Brazilian government injected an additional 5 billion Brazilian real (BZL) into the economy through government spending and it resulted in an increase in real income of 15 billion BZL, the value of the multiplier would be 3. The multiplier process is based on the idea that one individual's spending is another individual's income. An increase in consumption immediately increases Aggregate Demand (AD). Store owners who have benefited from the extra consumption now have extra income. They spend some of that income on goods/services, and their expenditure on goods/services is now income for the next tier of individuals. Due to successive rounds of spending, the final increase in national income is much larger than the initial injection. The size of the multiplier is dependent on the size of leakages that occur during the process. The higher the leakages, the smaller the multiplier. The initial injection shifts AD to the right. The result of the multiplier process is that there is then a secondary movement of AD to the right which (if the multiplier were 2) may be double the initial movement. The multiplier can also work in reverse when injections are reduced (downward multiplier effect). The Effects of Marginal Propensities on the Multiplier: The 'marginal propensities' refer to the proportion of the next dollar earned that a consumer saves, consumes, is taxed, or spends on imports. Marginal propensities are calculated for economies and provide insights into how each additional dollar of income is allocated. For example, Sweden has a higher tendency to save than the USA, meaning their marginal propensity to save is higher. The USA, therefore, has a greater multiplier on any injections into the Circular Flow. Page 3: An Explanation of the Marginal Propensities Marginal Propensity to Consume (MPC): The proportion of additional income that is spent on consumption (C): MPC = C / Y Marginal Propensity to Save (MPS): The proportion of additional income that is saved (S): MPS = S / Y Marginal Propensity to Tax (MPT): The proportion of additional income that is paid in tax (T): MPT = T / Y Marginal Propensity to Import (MPM): The proportion of additional income that is spent on imports (M): MPM = M / Y Calculating the Multiplier: The value of the multiplier can be calculated in one of two ways: By focusing on the marginal propensity to consume (MPC) By focusing on the withdrawals that occur on each additional dollar of income (MPS + MPT + MPM) 1. Focusing on the MPC: Multiplier = 1 / (1 MPC) 2. Focusing on the Withdrawals: Multiplier = 1 / MPW = 1 / (MPM + MPS + MPT) Page 4: WORKED EXAMPLE: An economy has the marginal propensity to save of 0.15, marginal propensity to tax of 0.20, and a marginal propensity to import of 0.15. a) Calculate the size of the multiplier: Answer: Step 1: Insert the values into the withdrawal formula. Multiplier = 1 / (MPM + MPS + MPT) = 1 / (0.15 + 0.15 + 0.20) = 1 / 0.5 = 2 b) If the government increases their infrastructure spending by £60m, calculate the total increase in GDP, assuming all other things remain equal. Answer: Step 2: Multiply the injection by the multiplier. Impact on GDP = Injection x multiplier = £60m x 2 = £120m Page 5: WORKED EXAMPLE: Calculate the amount of government spending required to restore an economy's macroeconomic equilibrium if the economy faces a $22bn recessionary gap and its MPC is 0.6. Answer: Step 1: Calculate the multiplier. Multiplier = 1 / (1 MPC) = 1 / (1 0.6) = 2.5 [1 mark] Step 2: Calculate the value of government spending required. Government spending required = $22bn / 2.5 = $8.80bn [1 mark] Page 6: Significance of the Multiplier in Shifting Aggregate Demand (AD): The greater the withdrawals, the smaller the value of the multiplier (and vice versa). The greater the MPC, the higher the value of the multiplier (and vice versa). Any change in factors impacting disposable income will change the multiplier. If taxes increase, the value of the multiplier reduces. If interest rates increase, savings increase, consumption decreases, and the multiplier reduces. If exchange rates appreciate, the level of imports increases, and the multiplier decreases. If confidence in the economy increases, consumption increases, and the multiplier increases. It is extremely useful for the government to know the value of the multiplier, as they can use it to judge the likely economic growth caused by increased spending. There is a time lag, as it takes time for the successive rounds of income to work through the economy. EXAM TIP: The final bullet point mentions time lags. This is an excellent point to include in any evaluation on the effectiveness of the multiplier. It may take up to 18 months for the full multiplier effect to be seen, and any change to consumer confidence during this period will impa
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