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Basic Macroeconomic Relationships

Chapter Overview. Identify the consumption

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Basic Macroeconomic Relationships

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    1. Basic Macroeconomic Relationships Chapter 8

    2. Chapter Overview Identify the consumption & savings functions: what influences them? What are the nonincome determinants of consumption & savings? What influences shifts and movement along a function? What is the relationship between interest rate & investment? What causes shifts in the Investment Demand Curve? What is the multiplier and what effect does it have?

    3. Review Circular Flow Diagram Note the major components of the Circular Flow (C, S, interest, I) Note the relationships (or flows) between the major components The following chapters will be focusing on these relationships and how we make macroeconomic decisions based on these relationships

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