- Y = C + I + G + (X - M)
-
Consumption
-
Consumption
-
spending on
- goods
- services
-
sup
- Income
-
MPC
- (Change in Consumption)(Change in Income)
- MPC + MPS = 1
-
Investment
-
Expectations go up
- investment goes up
-
Cost of Capital
- if rises
- investment falls
- Rate of interest
- Government Spending
- Exports
-
Imports
- MPM is high in Ireland
-
Income Rises
- M rises
-
MPM
- (Change in Imports) (Change in Income)