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Small wealth effect - PowerPoint PPT Presentation

Consumption & Investment

Consumption & Investment. Supplement. Multiplier Effect. An exogenous change in demand has a larger effect on total demand, the larger is the effect of current GDP on consumption of domestic goods. If budget constraints or precautionary savings are important then mpc may be high and mpd high.

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Small wealth effect - PowerPoint PPT Presentation

Consumption &amp; Investment

Consumption & Investment