Chapter 4 Consumption, Saving, and Investment
Copyright © 2005 Pearson Addison-Wesley. All rights reserved. 4-2 Figure 4.1(a) The index of consumer sentiment, January 1987–December 1994
Copyright © 2005 Pearson Addison-Wesley. All rights reserved. 4-3 Figure 4.1(b) Total consumption expenditures and consumption expenditures on durable goods, 1987–1994
Copyright © 2005 Pearson Addison-Wesley. All rights reserved. 4-4 Table 4.1 Calculating After-Tax Interest Rates
Copyright © 2005 Pearson Addison-Wesley. All rights reserved. 4-5
Copyright © 2005 Pearson Addison-Wesley. All rights reserved. 4-6 Application A Ricardian Tax Cut?
Copyright © 2005 Pearson Addison-Wesley. All rights reserved. 4-7 Figure 4.2 Determination of the desired capital stock
Copyright © 2005 Pearson Addison-Wesley. All rights reserved. 4-8 Figure 4.3 A decline in the real interest rate raises the desired capital stock
Copyright © 2005 Pearson Addison-Wesley. All rights reserved. 4-9 Figure 4.4 An increase in the expected future MPK raises the desired capital stock
Copyright © 2005 Pearson Addison-Wesley. All rights reserved Table 4.2 Effective Tax Rate on Capital, 1990, Selected Countries
Copyright © 2005 Pearson Addison-Wesley. All rights reserved Figure 4.5 Gross and net investment, 1929–2002
Copyright © 2005 Pearson Addison-Wesley. All rights reserved. 4-12
Copyright © 2005 Pearson Addison-Wesley. All rights reserved Figure 4.6 Goods market equilibrium
Copyright © 2005 Pearson Addison-Wesley. All rights reserved Table 4.3 Components of Aggregate Demand for Goods (An Example)
Copyright © 2005 Pearson Addison-Wesley. All rights reserved. 4-15
Copyright © 2005 Pearson Addison-Wesley. All rights reserved Figure 4.7 A decline in desired saving
Copyright © 2005 Pearson Addison-Wesley. All rights reserved Figure 4.8 An increase in desired investment
Copyright © 2005 Pearson Addison-Wesley. All rights reserved Figure 4.9 Real U.S. stock prices and the ratio of consumption to GDP, 1987–2002
Copyright © 2005 Pearson Addison-Wesley. All rights reserved Figure 4.10 Investment and Tobin’s q, 1987–2002
Copyright © 2005 Pearson Addison-Wesley. All rights reserved. 4-20
Copyright © 2005 Pearson Addison-Wesley. All rights reserved Key Diagram 3 The saving– investment diagram
Copyright © 2005 Pearson Addison-Wesley. All rights reserved Figure 4.A.1 The budget line
Copyright © 2005 Pearson Addison-Wesley. All rights reserved Figure 4.A.2 Indifference curves
Copyright © 2005 Pearson Addison-Wesley. All rights reserved Figure 4.A.3 The optimal consumption combination
Copyright © 2005 Pearson Addison-Wesley. All rights reserved Figure 4.A.4 An increase in income or wealth
Copyright © 2005 Pearson Addison-Wesley. All rights reserved Figure 4.A.5 Life-cycle consumption, income, and saving
Copyright © 2005 Pearson Addison-Wesley. All rights reserved Figure 4.A.5 Life-cycle consumption, income, and saving (cont’d)
Copyright © 2005 Pearson Addison-Wesley. All rights reserved Figure 4.A.6 The effect of an increase in the real interest rate on the budget line
Copyright © 2005 Pearson Addison-Wesley. All rights reserved Figure 4.A.7 The substitution effect of an increase in the real interest rate
Copyright © 2005 Pearson Addison-Wesley. All rights reserved Figure 4.A.8 An increase in the real interest rate with both an income effect and a substitution effect