Multipliers 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 and Inflation ECO 202 Year 1930 1931 1932 1933 1934 1935 1936 1937 1938 1939 1940 1941 1942 1943 1944 1945 1946 1947 1948 1949 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 Unemployment Rate 8.7% 15.9% 23.6% 24.9% 21.7% 20.1% 16.9% 14.3% 19.0% 17.2% 14.6% 9.9% 4.7% 1.9% 1.2% 1.9% 3.9% 3.9% 4.0% 6.6% 4.3% 3.1% 2.7% 4.5% 5.0% 4.2% 4.2% 5.2% 6.2% 5.3% GDP Growth -8.5% -6.4% -12.9% -1.2% 10.8% 8.9% 12.9% 5.1% -3.3% 8.0% 8.8% 17.7% 18.9% 17.0% 8.0% -1.0% -11.6% -1.1% 4.1% -0.6% 8.7% 8.0% 4.1% 4.7% -0.6% 7.1% 2.1% 2.1% -0.7% 6.9% Inflation Rate -6.4% -9.3% -10.3% 0.8% 1.5% 3.0% 1.4% 2.9% -2.8% 0% 0.7% 9.9% 9.0% 3.0% 2.3% 2.2% 18.1% 8.8% 3.0% -2.1% 5.9% 6.0% 0.8% 0.7% -0.7% 0.4% 3.0% 2.9% 1.8% 1.7% Cont’d • The consumer expenditures at the period of war increased due to increase in the government spending. • The stimulus of the government consumption was in the funding of the war. • The private expenditures at the time reduced and this led to the reduction of the growth of the economy. • The characteristics of the economy was characterized by increased hostilities and this affected the proportions of the economy in the outbreak ECO 202 Interest Rates ECO 202 References Lee E., O. (1997). The Macroeconomic Effects of War Finance in the United States: World War II and the Korean War. The American Economic Review, (1), 23. Mason, W. I., & Russell, J. O. (2012). United States Import Restraints : Economic Effects. New York: Nova Science Publishers, Inc. Miller, O. (2016). War, the state and the formation of the North Korean industrial working class, 1931–60. Third World Quarterly, 37(10), 1901-1920. doi:10.1080/01436597.2016.1171707 ECO 202 Discussion Rubric: Undergraduate Your active participation in the discussion forums is essential to your overall success this term. Discussion questions are designed to help you make meaningful connections between the course content and the larger concepts and goals of the course. These discussions offer you the opportunity to express your own thoughts, ask questions for clarification, and gain insight from your classmates’ responses and instructor’s guidance. Requirements for Discussion Board Assignments Students are required to post one (1) initial post and to follow up with at least two (2) response posts for each discussion board assignment.