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In microeconomics, the expenditure function represents the minimum amount of expenditure needed to achieve a given level of utility, given a utility function and the prices of goods. Formally, if there is a utility function u {\displaystyle u} that describes preferences over n goods, the expenditure function e ( p , u ∗ ) {\displaystyle e(p,u ...
In macroeconomics, a multiplier is a factor of proportionality that measures how much an endogenous variable changes in response to a change in some exogenous variable. For example, suppose variable x changes by k units, which causes another variable y to change by M × k units.
In microeconomics, the expenditure minimization problem is the dual of the utility maximization problem: "how much money do I need to reach a certain level of happiness?". This question comes in two parts. Given a consumer's utility function, prices, and a utility target,
Programming with Big Data in R (pbdR) [1] is a series of R packages and an environment for statistical computing with big data by using high-performance statistical computation. [ 2 ] [ 3 ] The pbdR uses the same programming language as R with S3/S4 classes and methods which is used among statisticians and data miners for developing statistical ...
The multiplier–accelerator model can be stated for a closed economy as follows: [3] First, the market-clearing level of economic activity is defined as that at which production exactly matches the total of government spending intentions, households' consumption intentions and firms' investing intentions.
Average propensity to consume (APC) (as well as the marginal propensity to consume) is a concept developed by John Maynard Keynes to analyze the consumption function, which is a formula where total consumption expenditures (C) of a household consist of autonomous consumption (C a) and income (Y) (or disposable income (Y d)) multiplied by marginal propensity to consume (c 1 or MPC).
Chapter 10 introduces the famous 'multiplier' through an example: if the marginal propensity to consume is 90%, then 'the multiplier k is 10; and the total employment caused by (e.g.) increased public works will be ten times the employment caused by the public works themselves' (pp. 116f). Formally Keynes writes the multiplier as k=1/S'(Y).
However, the size of this multiplier effect is likely to be diminished by two considerations: first, an upward push that the new spending gives to interest rates, which diminishes spending on goods such as physical capital and consumer durables; and second, an upward push that the spending gives to the general price level, which diminishes the ...