| Learning Objectives |
Equilibrium in the goods market may be depicted using a simple macro-model of the relationship between Income(Y) and Aggregate Expenditure(AE). For a discussion of the specifications used in the model see the goods market.
The parameters below provide a large number of possible solutions to the model and demonstrate important aspects of the macro theory. Select a set of parameters for the baseline and, then change some of the assumptions to examine the impacts of an alternative scenario. Both the baseline and the alternative scenario will appear on the graphical solution of the model.