AP Economics – 3/28/19

I.  Bellwork

• 16.3 WS on Ilearn 1-3 Q&A

II.  Objectives:

• Describe the multiplier process by which initial changes in spending lead to further changes in spending
• Use the consumption function to show how current disposable income affects consumer spending
• Explain how expected future income and aggregate wealth affect consumer spending
• Identify the determinants of investment spending
• Explain why investment spending is considered a leading indicator of the future state of the economy

III.  Income & Expenditure  pages 159-169

B.Shifts of the Aggregate Consumption Function C= a + MPC × Yd

1. Changes in Expected Future Disposable Income
2. Changes in Aggregate Wealth

C. Investment Spending

1. The Interest Rate and Investment Spending
2. Expected Future Real GDP, Production Capacity, and Investment Spending

D. Inventories & Unplanned Investment Spending pg 169 – Thinking Map (Positive and Negative Planned Inventory)

IV.  Classwork

• Macro 3.1 Practice

• Macro 3.1- Aggregate Demand Practice

• Module 16 iLearn Part A Questions

AP Economics