Macro 9.26 - P = C P + I P + I U EQm = I U = 0 then Y P = C...

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GDP Identity EQ m Condition 1) No Government 2) Closed Economy- No Exports/ Imports 3) ‘Slack Conditions’ a) Prices are Sticky b) –U/E GDPexp = C + I + G + X - M Y A = C A + I A G + X – M = 0 GDP Identity- Always true. Assumptions: Y A = Y P P= Planned C A = C P I A = I P + I U U= Unplanned Y
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Unformatted text preview: P = C P + I P + I U EQm = I U = 0 then Y P = C P + I P in equilibrium If I U doesnt equal 0, then disequilibrium Determinant of C: 1) Current Y 2) Expected Future income (EFI) 3) Real Wealth (w) 4) Interest Rates (R) 5) Confidence (Conf)...
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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.

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Macro 9.26 - P = C P + I P + I U EQm = I U = 0 then Y P = C...

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