How far does one purchase go?
Follow spending through the economy to understand consumption, inventories and equilibrium GDP. Move the diagrams, then practise with ten worked Solve questions.
How much of extra income gets spent?
| Disposable income | Consumption |
|---|---|
| $800 | $600 |
| $1,000 | $720 |
How much of extra income gets spent?
All examples are fictional. Amounts are real dollars per period. Assume fixed prices and no taxes, government purchases or trade, so disposable income equals real GDP. Planned investment stays fixed unless the question changes it. Keep intermediate values unrounded.
Where does extra income go?
| Position | YD | C | S |
|---|---|---|---|
| First | 800 | 680 | … |
| Second | 1,000 | 820 | … |
| Change | … | … | … |
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