The document discusses key macroeconomic concepts including aggregate demand, aggregate supply, the consumption function, investment function, and the multiplier. It provides the following key points: - Aggregate demand is the total demand for final goods and services in an economy. It is affected by factors like money, taxes, prices, and trade. - Aggregate supply represents the maximum output an economy can produce at full employment. It can shift due to changes in inputs like labor, capital, technology and costs. - The consumption function explains autonomous and induced consumption and how consumption relates to disposable income based on the marginal propensity to consume. - The investment function depends on interest rates, profit expectations and taxes, and

9. Putting AD and AS together Prices output AS Y f AD Y 1 In this situation, the economy would be operating at less than capacity, there would be unemployment and the economy might be growing only slowly. AD 1 Y 2 A shift in the AD curve to AD1 as a result of a change in any or all of the factors affecting AD would increase growth, reduce unemployment but at a cost of higher inflation (a trade-off)

14. 45 degree model cons income C=a+bY 45Degree line Intersection with 45degree line gives y=c

15. 45 degree model

19. Shift of Investment Function: