Economics HL
4
Chapters
117
Notes
Unit 1 - Intro To Econ & Core Concepts
Unit 2 - Microeconomics
Unit 3 - Macroeconomics
Unlocking National Income Stats: What They Reveal About Economies
GNI vs. GDP: Which Better Measures Economic Well-Being?
Understanding Aggregate Demand Beyond GDP
Understanding Aggregate Supply Monetarist Vs. Keynesian Views
Understanding Equilibrium Monetarist Vs Keynesian Models Explained
Understanding Macroeconomic Equilibrium: A Deep Dive
Economic Growth Blessing or Curse for Living Standards
Understanding Unemployment Myths, Measurements, and Meaning
Deflation Demystified: Why Lower Prices Aren't Always Better!
Understanding Inflation Insights & Implications For Economies
Understanding Equality Vs. Equity In Income Distribution
Understanding Economic Inequality Income vs. Wealth
Unveiling Income Inequality The Power of Lorenz Curve & Gini Coefficient
Understanding 2018's Lorenz Curve Income Quintile Insights
Understanding Poverty Absolute Vs. Relative Explained
Understanding Poverty Beyond Just Income Measures
Understanding Globalization, Technology, and Income Inequality Impact
Understanding Taxes From Direct To VAT Explained!
Understanding Tax Rates ATR vs MTR Explained
Unlocking Equity: How Taxation Curbs Income Inequalities
Strategies To Combat Poverty Beyond Traditional Taxation
Unraveling Money From Basics To Banking & Policy Mechanics
Understanding The Demand For Money: A Deep Dive
Central Bank's Tools Steering Money Supply & Interest Rates
Impact of Contractionary Monetary Policy on Aggregate Demand
Monetary Policy Key Strengths and Limitations Explained
Mastering Fiscal Policy How Government Spending Influences Economy
Unlocking The Power Of The Keynesian Multiplier
Unveiling Fiscal Policy: Key Advantages & Notable Disadvantages
Unlocking Economic Growth: The Power of Supply-Side Policies
Boosting Growth: The Power of Supply-Side Policies
Unveiling Supply-Side Policies: Market-Based Vs. Interventionist Insights
Unlocking Macroeconomic Objectives: Tools & Tactics for Policymakers
Mastering Price Stability: Fiscal vs. Monetary Policies
Effective Policies To Counter Different Types Of Unemployment
Macroeconomic Dilemma: Unemployment Vs. Inflation
Unit 4 - The Global Economy
Economics HL
Unit 3 - Macroeconomics
Unlocking The Power Of The Keynesian Multiplier
654 words
4 mins read
Last edited on 5th Nov 2024
Table of content
Introduction to the multiplier
- Who Invented It? JM Keynes and RF Kahn.
- What Is It? A concept that shows how a change in government spending leads to a bigger change in national income.
- Formula: ΔY = k * ΔG, where ΔY is the change in national income, ΔG is the change in government spending, and k is the multiplier.
Understanding the multiplier effect
- Real-World Example: Imagine the government hires people to dig holes and bury bottles for $100 million. This money doesn't stop there.
- Round 1: Workers spend their income on milk.
- Round 2: Milk producers spend on haircuts.
- Round 3: The process continues, boosting the economy.
- Important Note: Income and production are the same.
Factors influencing the multiplier
- Marginal Propensity to Consume (MPC): If you spend $100 on a haircut and the hairdresser spends $80 on cheese, the MPC is 0.8.
- Withdrawals (leakages): These are parts of the income that are saved, taxed, or spent on imports.
- Marginal Propensity to Withdraw (MPW): The sum of savings (MPS), taxes (MPT), and import spending (MPM).
- Real-World Examples:
- 2020 U.S. stimulus response to Covid-19 had a multiplier of 2.
- 2009 Obama Stimulus Plan had a multiplier of 1.6.
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Economics HL
Unit 3 - Macroeconomics
Unlocking The Power Of The Keynesian Multiplier
654 words
4 mins read
Last edited on 5th Nov 2024
Table of content
Introduction to the multiplier
- Who Invented It? JM Keynes and RF Kahn.
- What Is It? A concept that shows how a change in government spending leads to a bigger change in national income.
- Formula: ΔY = k * ΔG, where ΔY is the change in national income, ΔG is the change in government spending, and k is the multiplier.
Understanding the multiplier effect
- Real-World Example: Imagine the government hires people to dig holes and bury bottles for $100 million. This money doesn't stop there.
- Round 1: Workers spend their income on milk.
- Round 2: Milk producers spend on haircuts.
- Round 3: The process continues, boosting the economy.
- Important Note: Income and production are the same.
Factors influencing the multiplier
- Marginal Propensity to Consume (MPC): If you spend $100 on a haircut and the hairdresser spends $80 on cheese, the MPC is 0.8.
- Withdrawals (leakages): These are parts of the income that are saved, taxed, or spent on imports.
- Marginal Propensity to Withdraw (MPW): The sum of savings (MPS), taxes (MPT), and import spending (MPM).
- Real-World Examples:
- 2020 U.S. stimulus response to Covid-19 had a multiplier of 2.
- 2009 Obama Stimulus Plan had a multiplier of 1.6.
Unlock the Full Content!
Dive deeper and gain exclusive access to premium files of Economics HL. Subscribe now and get closer to that 45 🌟
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