—————— SS _§: Aggregate bemand and Its Components \\\\\Ve_ ic ik x of (S My 1-@f—ab— accounting year £ Components: of AD. f % || Prete Consumption Expenapeure (C) + TER ake call | : 6 | Tt alt Ft ‘ity || Pes 2 fovesfors en the purchase & uch goods whth add +o their sfpck of caphta. Dp i Fr 2S Fea 4 Fi pratt | Pale of Iplerest % the pitojale determinate of | private it 1 fifa wv Expend? taste (61) It thcludes both govern men f_Consiapop: Fon 2x; serment fp» 4 Goverment Consumption Exp. fe the exp. en tee 4 collec tye - fons Fon: | Govern P exp- < ly of reads, dams brFdges ete.classmate or a (e— ) —— = # | prose = 3 Pduerd,_. foves oh %_delemfhed by _cansfelerartfian_of- propitsen 4. ether band. —gevt.frvst_?S_autenaneus Fhvap whith deterred by —censftleralfon of secFal oh 1 fare. 7 2% Net Expor te Gem): Fepork repens fo demand Lr domestfealliy prediced. goede be Row Deport repers to demand by our resfdente T of tbe. goods Precluced. abroad | Expenaftwe by the Sh cur geode fs Qdded tn the “totay pendFture (AD) fr the Scormmmy LHe, exp op Proports, fg subtracted Net Exports Abs C+ 0 + @ + (x-m) AD Shedule 2 AB schedule 1S a tobe ShowFng combed. behaviour of < P Comesbonalibg to alffperant level of theome Cy). ~he eccremy - 3 * | lfo a 45° Cre of Jeferénce. Ae 7 oa te T niga this tet day bore sei li U ea PI SIS Selig ape pte crn eee is Conswroptfon Fanctton 6 The ie. 2 Zs °. 2 5, theTr wants atreetiy B_catled pscemp On expend The ais “q sense plan function oa Propensf. io to the ratio blo CFV (1b chou (eve of-—C_wflh respect tm a given level of Y Morngfnad Fropenstey to Consume: (MPe}k tt repers towe thange fn Tnearme. | MPC c¢ ac ay1,200 and C Tocreases I-¥ yofeerenceo 1eoo_to 2, aaa in meana tak change fo Y fie 200 at change tp Y' fe 200 rp_ 00 - FOO ana AC f% 100 Ppons 46 12851 188 el see ay 200 2 Plgebrit expressfon of cf ae f° € +8 C+ rfnfmum level of conswmptfon be marginal prospenaPty consump tPon Y © Income Find ¢ when ¢ = 200°, MPceo-5, Y= 1/000 ct f+by. = 200+ 0-5 x 000 <8 7100 _Savfng Function 2 Saving fS the excess freome_ over ! benenrn tii during. an ace canting Veon + 62 Fae The: behowSou r of S wth respect: foy % called Seng | function(= —_ _——, ——} ee a ih - : +) See — + 7 yj © “ iS ¥ : ZL ye 2 7 ¥F tS a Sf the saving. fenctian chouthg the _bebavPaus of S$ —. wrth bespect to YS 2 a chatgre (Pre_meving upewant. lt ¢ Zi telatfon by . © R negative Sa_leng a ory tr Frepenstty te Save. ey he rats b/w S ond y--lt Shows “be _ | ; of oft regpect to a. given level of Y. Om 7 Save : It Fs the ratio b/w total Saving ond. total Pocome, at a given level of fncore 9h the economy APS © S 7Gee Rm to Save + (EB mre Hs Sag larginal. Propensity 49 Save fh saving ani_caused by change tp theerme. —_ Mpg « Ag - AY 1 Ss -S +SY & | Constant Saving, 1 s_= MPS Ye Income. Fink S$ wher € «200 .mpoeo-q Ye l000 S « -S +sy = 9-200 +, 0-4X1/000 <> - 200 +400 | « 200 Neoke : -5 % the -Ve_expressiton of & .. +