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Aggregate Expenditure Components ,[object Object],© 2006 Thomson/South-Western
Exhibit 1:  Disposable Income, Consumption, and Saving ,[object Object],[object Object]
Exhibit 2:  U.S. Consumption Depends on Disposable Income
The Consumption Function ,[object Object],[object Object],[object Object],[object Object]
Exhibit 3: The Consumption Function ,[object Object],[object Object]
Exhibit 4a:  Marginal Propensity to Consume ,[object Object],[object Object]
Exhibit 4b: Marginal Propensity to Save ,[object Object],[object Object],[object Object],[object Object]
Nonincome Determinants ,[object Object],[object Object],[object Object],[object Object],[object Object]
Net Wealth ,[object Object],[object Object],[object Object]
Exhibit 5: Shifts in the Consumption Function 0 C Real disposable income ,[object Object],[object Object],Real Consumption C" C'
Shifts and Movements Along ,[object Object],[object Object],[object Object]
Price Level ,[object Object],[object Object],[object Object]
Interest Rate ,[object Object],[object Object],[object Object],[object Object],[object Object]
Expectations ,[object Object],[object Object],[object Object]
Investment ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Demand for Investment ,[object Object],[object Object],[object Object]
Exhibit 6: Rate of Return on Golf Carts and the Opportunity Cost of Funds
Exhibit 7: Investment Demand Curve for the Economy ,[object Object],[object Object],[object Object]
Planned Investment and Income ,[object Object],[object Object]
Investment Function ,[object Object],[object Object],[object Object],[object Object]
Market Interest Rate ,[object Object],[object Object]
Exhibit 8: Planned Investment Function 1.0   0  2.0  4.0  6.0  8.0  10.0  12.0  14.0 Real disposable income   (trillions of dollars) I  The horizontal investment functions imply that planned investment does not vary with real disposable income, it is autonomous Real planned investment ( trillions of dollars)   1.1 I"  0.9 I'
Business Expectations ,[object Object],[object Object],[object Object]
Business Expectations ,[object Object],[object Object],[object Object],[object Object],[object Object]
Exhibit 9:  Annual Percentage Change in U.S. Real GDP, Consumption, Investment
Government Purchase Function ,[object Object],[object Object]
Transfer Payments ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Net Taxes ,[object Object],[object Object],[object Object],[object Object]
Net Exports and Income ,[object Object],[object Object],[object Object]
Net Export Function ,[object Object],[object Object],[object Object],[object Object]
Nonincome Determinants of Net Exports ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Exhibit 10: Net Export Function
Exhibit 11:  U.S. Spending Components as Percentages of GDP Since 1959

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Aggregate Expenditure Components

  • 1.
  • 2.
  • 3. Exhibit 2: U.S. Consumption Depends on Disposable Income
  • 4.
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  • 8.
  • 9.
  • 10.
  • 11.
  • 12.
  • 13.
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  • 15.
  • 16.
  • 17. Exhibit 6: Rate of Return on Golf Carts and the Opportunity Cost of Funds
  • 18.
  • 19.
  • 20.
  • 21.
  • 22. Exhibit 8: Planned Investment Function 1.0 0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 Real disposable income (trillions of dollars) I The horizontal investment functions imply that planned investment does not vary with real disposable income, it is autonomous Real planned investment ( trillions of dollars) 1.1 I" 0.9 I'
  • 23.
  • 24.
  • 25. Exhibit 9: Annual Percentage Change in U.S. Real GDP, Consumption, Investment
  • 26.
  • 27.
  • 28.
  • 29.
  • 30.
  • 31.
  • 32. Exhibit 10: Net Export Function
  • 33. Exhibit 11: U.S. Spending Components as Percentages of GDP Since 1959