Aggregate Demand, Consumption & The Level of Economic Activity - A-Level Macroeconomics / Economics

A detailed extension of aggregate demand theory and a detailed look at the consumption function and MPC. Perfect for year 2 A-Level macroeconomics.

Main Aim: Students will expand their theory of AD and look at how consumption can be looked to through both the consumption function and MPC. Students will also look at the Multiplier concept.

This lesson covers the following areas:

• Consumption
• The consumption function and graph
• Marginal propensity to consume (MPC)
• Influences on MPC
• The multiplier effect
• The reserve multiplier.

The lesson concludes with exam-based questions on a news article. This lesson could easily last 2 hours.