1. EXHIBIT 1 Autonomous Government Spending and Net Exports Curves19
EXHIBIT 1 Autonomous Government Spending and Net Exports Curves ( a ) A u t o n o m o u s g o v e r n m e n t s p e n d i n g ( b ) A u t o n o m o u s n e t e x p o r t s 2 . + . 4 I n c r e a s i g o v m t p d 1 . 7 5 + . 3 1 . 5 G 1 + . 2 P o s i t v e n x p r 1 . 2 5 + . 1 ( X – M ) 2 1 . G ( X – M ) Z e r o n t x p s . 7 5 – . 1 ( X – M ) 1 N e g a t i v n x p o r s . 5 G 2 – . 2 D e c r a s i n g o v m t p d . 2 5 – . 3 1 2 3 4 5 6 7 8 1 2 3 4 5 6 7 8 R e a l G D P R e a l G D P ( t r i l l i o n s o f d o l l a r s p e r y e a r ) ( t r i l l i o n s o f d o l l a r s p e r y e a r )

2. EXHIBIT 3 The Keynesian Aggregate Expenditures–Output Model19
EXHIBIT 3 The Keynesian Aggregate Expenditures–Output Model A E = Y 4 5 o 8 I n v e t o r y a c u m l i 7 A E 6 R e a l a g g r e g a t e E 5 e x p e n d i t u r e s ( t r i l l i o n s o f d o l l a r s 4 p e r y e a r ) 3 2 I n v e t o r y d p l i F u l e m p o y n t 1 + G D P g a p 1 2 3 4 5 6 7 8 R e a l G D P ( t r i l l i o n s o f d o l l a r s p e r y e a r )

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EXHIBIT 4 The Spending Multiplier Effect of a Change in Government Spending A E = Y A E 2 A E 1 E 1 6 . e R e a l c o n s u m p t i o n c d a n d g o v e r n m e n t a 5 . 5 p u r c h a s e s b D G = + $ . 5 t r i l o n D Y = + $ . 5 t r i l o n ( t r i l l i o n s o f d o l l a r s p e r y e a r ) 5 . E F u l e m p o y n t 5 . 5 . 5 6 . R e a l G D P ( t r i l l i o n s o f d o l l a r s p e r y e a r ) C A U S A T I O N C H A I N I n i t a l c r e s g o v m p d O p e r a t s h o u g m l i L a r g e i n c s t x p d u

4. EXHIBIT 7 A Recessionary Gap19
EXHIBIT 7 A Recessionary Gap 4 5 A E = Y 8 A E 2 7 E 2 6 A E 1 R e c s i o n a r y g p = $ 1 t l A g g r e g a t e 5 e x p e n d i t u r e s a ( t r i l l i o n s E 1 o f d o l l a r s 4 p e r y e a r ) 3 2 F u l e m p o y n t 1 + G D P g a p 1 2 3 4 5 6 7 8 R e a l G D P ( t r i l l i o n s o f d o l l a r s p e r y e a r )

5. EXHIBIT 8 An Inflationary Gap19
EXHIBIT 8 An Inflationary Gap A E = Y 4 5 8 A E 1 7 E 1 6 A E 2 I n f l a t i o r y g p = $ 1 A g r e a t x p n d i u s ( l o f y ) a 5 4 E 2 3 2 F u l e m p o y n t 1 – G D P g a p 1 2 3 4 5 6 7 8 R e a l G D P ( t r i o n s f d p y )

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EXHIBIT 9 Keynesian Aggregate Expenditures–Output Model When the MPC Is 3/5 1 4 5 o 9 8 A E R e a l 7 a g g r e g a t e e x p e n d i t u r e s 6 E ( t r i l l i o n s o f 5 d o l l a r s p e r y e a r ) 4 3 2 F u l e m p o y n t 1 1 2 3 4 5 6 7 8 9 1 R e a l G D P ( t r i l l i o n s o f d o l l a r s p e r y e a r )