AE equilibrium, inventories and expenditure shocks

What this note covers

1. Build the aggregate-expenditure function
2. Solve equilibrium algebraically and graphically
3. Use inventories to explain adjustment
4. Calculate an autonomous expenditure shock
5. Trace the multiplier process and its limits
6. Integrate equilibrium, policy and evaluation

6 sections · 10 key terms & formulas · 6 common mistakes