Macroeconomics

1
Macroeconomics

• ECN 3102 CHAPTER 4

2
Consumption, Saving, and Investment
3
Chapter Outline

• Consumption and Saving
• Investment
• Goods Market Equilibrium

4
Consumption and Saving

• The importance of consumption and saving
• The consumption and saving decision of an
  individual
• Effect of changes in current income
• Effect of changes in expected future income
• Effect of changes in real interest rate
• Fiscal policy

5
Investment

• Why is investment important
• The desired capital stock
• Changes in the desired capital stock
• From the desired capital stock to investment

6
Goods Market Equilibrium

• Y Cd Id G
• Sd Y Cd G,
• Equilibrium where Sd Id
• Shifts of the saving curve
• Shifts of the investment curve