Lecture 11
The MULTIPLIER


1. Full-employment GDP

1.1 Recessionary gap

1.2 Inflationary gap


2. Change in exogenous spending

2.1 Model #1

2.2 Computing the multiplier

2.3 More about the multiplier


3. A first look at fiscal policy

3.1 Questions


4. Transfer payments


5. International trade

5.1 Changes in the exchange rate

5.2 Change in foreign GDP


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