{"id":760,"date":"2011-08-17T22:30:16","date_gmt":"2011-08-18T04:30:16","guid":{"rendered":"http:\/\/opengecko.com\/economics\/the-multiplier-accelerator-and-crowding-out\/"},"modified":"2011-08-18T00:32:03","modified_gmt":"2011-08-18T06:32:03","slug":"the-multiplier-accelerator-and-crowding-out","status":"publish","type":"post","link":"https:\/\/opengecko.com\/geckoview\/economics\/the-multiplier-accelerator-and-crowding-out\/","title":{"rendered":"The Multiplier, Accelerator and Crowding Out"},"content":{"rendered":"<p><font size=\"4\">These are Higher Level Extension Topics, and are listed in the following way on the 2005 IB syllabus:<\/font><\/p>\n<blockquote>\n<p><font size=\"4\">\u2022 Multiplier       <br \/>[including calculation of multiplier]        <br \/>\u2022 Accelerator        <br \/>\u2022 \u201cCrowding out\u201d<\/font><\/p>\n<\/blockquote>\n<p><font size=\"4\">Here are some video resources and questions to help you understand these concepts.<\/font><\/p>\n<p><font size=\"4\">Watch the following video and then answer the questions underneath.<\/font><\/p>\n<h3><u><font size=\"4\">MPC and the Multiplier by <\/font><\/u><a href=\"http:\/\/www.youtube.com\/user\/FitzEcon\"><strong><font size=\"4\">FitzEcon<\/font><\/strong><\/a><\/h3>\n<p><iframe loading=\"lazy\" height=\"345\" src=\"http:\/\/www.youtube.com\/embed\/CqgwRMvatKw?rel=0\" frameborder=\"0\" width=\"560\" allowfullscreen=\"allowfullscreen\"><\/iframe><\/p>\n<p><font size=\"4\">1) Define the MPC?     <br \/>2) What is the formula for the multiplier?      <br \/>3) Define the MPS.      <br \/>4) Record, in writing \/ notes, the example given by the speaker.      <br \/>5) Extension &#8211; Check your text book\u2019s entry and enhance your explanation of the multiplier, with particular attention to the concept of &#8217;rounds&#8217;<\/font><\/p>\n<p><font size=\"4\"><\/font><\/p>\n<p><u><font size=\"4\">Fiscal policy and the multiplier effect by <\/font><a href=\"http:\/\/www.youtube.com\/user\/pajholden\"><strong><font size=\"4\">pajholden<\/font><\/strong><\/a><\/u><\/p>\n<p><a href=\"http:\/\/www.youtube.com\/watch?v=0CjNlyiDAno\" target=\"_blank\"><font size=\"4\">Click here for video<\/font><\/a><\/p>\n<p><font size=\"4\">6) Why, in the example given, does the government want to boost Aggregate Demand?      <br \/>7) What would be the trade-off of this economic goal?      <br \/>8] Demonstrate the above on a sketch diagram.      <br \/>9) What two fiscal policy options does the government have?      <br \/>10) What does the theory of the multiplier effect state? (add to previous explanation)      <br \/>11) Briefly summarise the example given of how an initial increase in spending on healthcare by the government leads to further increases in AD.      <br \/>12) What are the difficulties mentionned which are associated with the multiplier effect?      <br \/>13) Extension \u2013 think about it &#8211; why might cutting tax be different in terms of the impact on the multiplier compared to increasing government spending by the same amount of money?<\/font><\/p>\n<p><font size=\"4\"><\/font><\/p>\n<h3><u><font size=\"4\">MEC and Accelerator investment theories by <\/font><\/u><a href=\"http:\/\/www.youtube.com\/user\/pajholden\"><strong><font size=\"4\">pajholden<\/font><\/strong><\/a><\/h3>\n<p><a href=\"http:\/\/www.youtube.com\/watch?v=nKDdZ5q8wrg\" target=\"_blank\"><font size=\"4\">Click her for video<\/font><\/a><\/p>\n<p> <font size=\"4\">NOTE You only need to focus on the Accelerator Theory (4 mins 16 secs onwards) for HL IB Economics (although it is harmless to view the MEC theory section)   <br \/><\/font>  <\/p>\n<p><font size=\"4\">14) What are the two types of investment mentionned &#8211; explain the difference.     <br \/>15) What is the Accelerator Theory in basic terms.      <br \/>16) Enhance your notes by checking your text book and following links:      <br \/><\/font><a href=\"http:\/\/tutor2u.net\/economics\/revision-notes\/as-macro-multiplier-accelerator.html\"><font size=\"4\">http:\/\/tutor2u.net\/economics\/revision-notes\/as-macro-multiplier-accelerator.html<\/font><\/a>    <br \/><font size=\"4\">Bottom of this page: <\/font><a href=\"http:\/\/econ.la.psu.edu\/~dshapiro\/l18nov04.htm\"><font size=\"4\">http:\/\/econ.la.psu.edu\/~dshapiro\/l18nov04.htm<\/font><\/a>    <br \/><a href=\"http:\/\/cafehayek.com\/2010\/02\/crowding-out.html\"><font size=\"4\">http:\/\/cafehayek.com\/2010\/02\/crowding-out.html<\/font><\/a><\/p>\n<p><font size=\"4\"><\/font><\/p>\n<p><u><font size=\"4\">Crowding Out<\/font><\/u><\/p>\n<p><font size=\"4\">Research and summarise information to include the following features under the topic of \u2018crowding out\u2019. Two useful videos and a slideshow are given at the end.<\/font><\/p>\n<ul>\n<li><font size=\"4\">Definitions<\/font><\/li>\n<li><font size=\"4\">Explanation of what it is<\/font><\/li>\n<li><font size=\"4\">Examples<\/font><\/li>\n<li><font size=\"4\">Diagrams<\/font><\/li>\n<li><font size=\"4\">Outline the difference between complete, partial and no crowding out.       <br \/><\/font><\/li>\n<\/ul>\n<h3><u><font size=\"4\">(Macro) Episode 27: Crowding Out &amp; Lags by <\/font><\/u><a href=\"http:\/\/www.youtube.com\/user\/mjmfoodie\"><strong><font size=\"4\">mjmfoodie<\/font><\/strong><\/a><\/h3>\n<p><font size=\"4\">Note that from c. 2mins 50 secs moves on to time lags \u2013 it is good revision of this separate topic!<\/font><\/p>\n<p><iframe loading=\"lazy\" height=\"390\" src=\"http:\/\/www.youtube.com\/embed\/RGlt0nEQdRI?rel=0\" frameborder=\"0\" width=\"480\" allowfullscreen=\"allowfullscreen\"><\/iframe><\/p>\n<p><font size=\"4\"><\/font><\/p>\n<p><u><font size=\"4\">A helpful animated slideshow: <\/font><\/u><\/p>\n<p><a href=\"http:\/\/www.reffonomics.com\/textbook2\/macroeconomics2\/introtomacro\/crowdingout.swf\" target=\"_blank\"><font size=\"4\">Crowding Out Effect by reffonomics.com \u2013 click here<\/font><\/a><\/p>\n<p><font size=\"4\"><\/font><\/p>\n<p><font size=\"4\">And finally, this is pure genius! \u2026<\/font><\/p>\n<h3><u><font size=\"4\">Crowding-Out Effect Song (Heavy Metal Edition) by <\/font><\/u><a href=\"http:\/\/www.youtube.com\/user\/medicotube\"><strong><font size=\"4\">medicotube<\/font><\/strong><\/a><\/h3>\n<p><iframe loading=\"lazy\" height=\"345\" src=\"http:\/\/www.youtube.com\/embed\/WgAYjC-TjDI?rel=0\" frameborder=\"0\" width=\"560\" allowfullscreen=\"allowfullscreen\"><\/iframe><\/p>\n","protected":false},"excerpt":{"rendered":"<p>These are Higher Level Extension Topics, and are listed in the following way on the 2005 IB syllabus: \u2022 Multiplier [including calculation of multiplier] \u2022 Accelerator \u2022 \u201cCrowding out\u201d Here are some video resources and questions to help you understand these concepts. Watch the following video and then answer the questions underneath. MPC and the&hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3,10,97],"tags":[236,238,237,239,240,235],"class_list":["post-760","post","type-post","status-publish","format-standard","hentry","category-economics","category-ib-economics","category-macroeconomics","tag-accelerator","tag-aggregate-demand","tag-crowding-out","tag-fiscal-policy","tag-keynesian","tag-multiplier"],"_links":{"self":[{"href":"https:\/\/opengecko.com\/geckoview\/wp-json\/wp\/v2\/posts\/760","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/opengecko.com\/geckoview\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/opengecko.com\/geckoview\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/opengecko.com\/geckoview\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/opengecko.com\/geckoview\/wp-json\/wp\/v2\/comments?post=760"}],"version-history":[{"count":2,"href":"https:\/\/opengecko.com\/geckoview\/wp-json\/wp\/v2\/posts\/760\/revisions"}],"predecessor-version":[{"id":762,"href":"https:\/\/opengecko.com\/geckoview\/wp-json\/wp\/v2\/posts\/760\/revisions\/762"}],"wp:attachment":[{"href":"https:\/\/opengecko.com\/geckoview\/wp-json\/wp\/v2\/media?parent=760"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/opengecko.com\/geckoview\/wp-json\/wp\/v2\/categories?post=760"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/opengecko.com\/geckoview\/wp-json\/wp\/v2\/tags?post=760"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}