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Unformatted text preview: PrT GDP identity & Equilibrium Condition Notation: y= Real Income = Real output C = Real consumption Expenditures I – Real Investment Expenditure GDP EXP = C + I = Y Two interpretations: GDP identity: Always True: C a + I a Actual Expenditure Determinants of consumption expenditures 1. Current Income 2. Expected future income 3. Real wealth (both financial and important durable goods like housing)...
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This note was uploaded on 04/15/2008 for the course ECON Macro taught by Professor Macinni during the Fall '07 term at Johns Hopkins.
- Fall '07