Chapter 27 Income and Expenditure - MPC/MPS

Chapter 27 Income and Expenditure - MPC/MPS

Author: Matthew Lonn

Students will analyze the multiplier effect and how it's calculated.

Students will teach concepts that examine the income and expenditure models (MPS, MPC, Consumption Function, Multiplier Effect).

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Questions you should be able to answer after the lesson.

What is the multiplier effect and what is the formula for calculating the multiplier?

What is the difference between marginal propensity to save and marginal propensity to consume?

How do you calculate MPC and MPS?

What does the consumption function show?

What is inventory investment?

What is unplanned inventory investment?

Chapter 27 Notes

MPS and MPC Explained

Practice calculating multiplier