Chapter+28

=**Chapter 28 - The Aggregate Expenditures Model**=

Key Items

 * The main focus of this chapter will be the aggregate expenditures model
 * The aggregate expenditures model was created by John Maynard Keynes
 * The model can be used by government in two ways by increasing Government Purchases or Lower Taxes to achieve equilibirum GDP

Key Symbols

 * C = Consumption
 * Ca = Consumption after taxes
 * S = Savings
 * Sa = Savings after taxes
 * Ig = Gross Investment
 * X = Exports
 * M = Imports
 * Xn = Net Exports
 * G = Government Purchases
 * T = Taxes

Key Formulas

 * C + Ig = GDP (private closed economy)
 * C + Ig + (X - M) = (private open economy)
 * C + Ig + Xn + G = (public open economy)
 * 1/(1 - MPC) = Multiplier
 * MPC + MPS = 1
 * Increase in Aggregate Expenditures/Increase in Real GDP = MPC