Class Notes - 10-8-07

Class Notes - 10-8-07 - Macroeconomics Class Notes 10/8/07...

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Macroeconomics – Class Notes – 10/8/07 SAVING AND INVESTMENT IN NATIONAL INCOME ACCOUNTS Recall: o Y (national income) = National Expenditure o Y = Consumption + Investments + Government spending + Net Exports o Y = C + I + G + NX Closed Economy: o Y = C + I + G Saving equal to: o Y – C – G = I S = I IMPORATANT o Saving equals: S = Y – C – G S = (Y – T – C) + (T - G) Where “T” = taxes (Y – C – T) = Private Savings (T – G) = Public Savings Total savings = Private + Public When there is a public deficit , public saving is negative . The government uses “bonds” to sell debt – buy bond now, turn in bond later and get interest back. Usually you will get interest back about every 2 years
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SAVING = INVESTMENT The Market For Loanable Funds Loanable Funds Market: assures that Saving = Investment (S=I) Supply of Loanable Funds by Lenders
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This note was uploaded on 04/15/2008 for the course ECON 101 taught by Professor Golden during the Fall '07 term at Allegheny.

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Class Notes - 10-8-07 - Macroeconomics Class Notes 10/8/07...

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