ASSIGNMENT OF

MACROECONOMICS
(SUMMARY)

Name : Ilham Anugraha Pramuditya

NIM : C1L014033
No: 39

JENDERAL SOEDIRMAN UNIVERSITY

ECONOMIC AND BUSINESS FACULTY
INTERNATIONAL ACCOUNTING
2015
 Macroeconomics Theory
An Introduction to Macroeconomics Analysis
Macroeconomics is the study of aggregate economics behavior. In
Macroeconomics we analyze the principle determinants of economys : level of
income, general level of prices and growth of income.
A model of Individual or aggregate econmic behavior represent a
simplification of real world economic complexities. For instance, in analyzing the
level of aggregate output, it has been useful to divide the economy into the
following spending sectors: household, business, government, and international.

Household
(consumption)

Business
(Investment) Value of
Aggregate
Goods and service
spending
produced
Government

International
(Net export)

Economists generally link the volume of consumption by the household sector to

the receipt of disposable income. Such behavior is specified by saying that
consumption C is a function f of disposable income Yd, or C = f(Yd)
Consumption Function

Notes:
= Autonomous consumption
b = MPC
( Y T ) = Disposable Income
The Level of Income in a Two-Sector Model of the
Economy
The Circular Flow in a Two-Sector Model of the Economy
Economy is composed of only two sector: business and household
No Saving Economy Saving Economy

The pattern:

Y=C+I
S=I
Y=C+S
C = C + bYd, where Yd = Y
I = I - I + Y

The Multiplier for a Two-Sector Model

Marginal Propensity to Consume

Notes:
is the change in consumption
is the change in disposable income that produced the consumption.

The other Pattern:

Y = C + bYd + I - I + Y
Y bY - Y = C + I - I
C + I I
Y (1 b - ) = 1 b
1
K= 1 b
Government and the Level of Income
The Circular Flow in a Three-Sector Economy and Equilibrium Income

The Pattern:

Y=C+I+G
Tx + S = I + G

Body Of Economy
Real Sector Monetary Sector
Commodity Market Money Market
Labor Market Capital Bond Market

An Important Function and The Expenditure Multiplier

The Pattern:

Z = Z + zY, where : Z is autonomous imports

Z is the marginal propensity to import

Household Sector Functions

The Pattern:

C = C + bYd
Two Sector Equilibrium Income:

C0+I
Y= 1b
Expenditure multiplier for autonomous changes in C and I:
1
k = 1b

Business Sector Functions

If Investment Function I = I + aY:
0
C +I
Y= 1ba

Expenditure multiplier for autonomous changes in C and I:

1
k = 1ba

Government Sector Functions

Tax Function:

Tx = Tx + tY
Spending Function:

G = G + gY