Основы экономики. Земскова Л.П. - 13 стр.

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13
4. In this lecture we treat investment demand as constant. Investment demand is
firms’ desired additions to physical capital – machinery and buildings – and
to inventories.
5. Aggregate demand is the amount all spending units in the economy plan to
spend on goods. The aggregate demand schedule shows the level of
aggregate demand at each level of income.
6. The goods market is in equilibrium when, at a given price level, output
produced is equal to aggregate spending, or aggregate demand, Y = C + I.
Equivalently, the equilibrium level of output, or income, is the level at which
aggregate demand is equal to income.
7. Adjustment toward the equilibrium level of output takes place through firms’
responses to undesired or unplanned additions to inventories. When output is
above the equilibrium level, the demand for goods is below output, and
inventories are being accumulated. Firms therefore cut output. Similarly,
when output is below the equilibrium level, inventories are being reduced,
and firms increase production.
8. Equilibrium in the goods market does not mean that output is at the potential,
or full-employment, level. With prices given, output may settle at some level
below potential, with firms unwilling to increase production because they do
not believe they will be able to sell more.
9. A $1 increase in planned investment demand causes equilibrium output to
increase by more that $1. The increase is larger because the increase in
output to meet higher investment demand also causes an increase in
consumption demand.
10. The multiplier is the ratio of the increase in equilibrium output to the
increase in demand that causes output to rise. In the model presented in this
lecture, the multiplier is equal to 1/(1 – MPC), or the inverse of the marginal
propensity to save.
11. The equilibrium condition that determines the level of output, or aggregate
demand equal to income, can equivalently be expressed as the equality of
planned saving and planned investment, S = I.
12. The paradox of thrift shows that a reduced desire to save may result in no
change in saving at all and only a higher level of output. The paradox shows
that increased saving at a time of insufficient aggregate demand is not a
virtue, even though we think of saving as a good thing.
KEY TERMS
Consumption function
Marginal propensity to consume (MPC)
Marginal propensity to save (MPS)
Investment function
Aggregate demand schedule
Undesired or unplanned inventory investment
Multiplier
Paradox of thrift

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