Multipliers book cliff notes

Aggregate expenditure is the total amount of spending in the economy that determines the level of the GDP. Components of aggregate expenditure are autonomous expenditure, planned private investments, government expenditure, and net exports. When autonomous expenditure increases or decreases, it has a multiplied effect on the GDP.

Referring to the 10-year historical period that you chose for your final project, discuss an example of a change in autonomous spending. Research a government policy implemented during that time and discuss the multiplier effect it had on the economy.The Korean war Brendon Cronin ECO 202 Brianne Christiano ECO 202 Ten-Year Period of U.S. Economic History Overview • The Korean war happened between 1950 and 1953 and its effect was felt in the US economic environment. • It was an era of power struggles between the non-communist and communist. • The invasion of North Korea led to the increase in the tax levels in United States. • The threats of Western armies in making the invasion led to the assessment of the forces that increased the risks of the war to other countries. ECO 202 GDP (2 slides) ECO 202 Cont’d • In response to the decrease of the levels of GDP the government introduced a stimulus to control wages and prices. • The prices in the stock market were affected leading to the need to focus on the rates of investment in the market. • The high taxation levels during the war period led to the change in the GDP levels and the increase in the deficit in the economy. • The negative effects of the war led to the high costs of leaving and the need to assess the consequences that occur in the economy. • The increase in the spending in the military affected the GDP levels as there was increase in the government spending. ECO 202 Unemployment