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Paul A. Samuelson BIG ISSUES OF ECONOMIC CONCERN Samuelson has offered the world many economic theories. One area he is widely known for is his views on the spending multiplier. Samuelson has presented a way through his aggregate demand model to demonstrate how the spending multiplier affects individual types of spending. There are several components of aggregate demand. The basis for understanding this model is as follows:  An increase in prices causes a drop in household assets, thus causing consumers to spend less.  Increases in domestic prices reduce exports, which causes an increase in spending on imports.  The interest rate effect is when prices increase, as does the Approximate words: 2483 Approximate pages: 10

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