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Unformatted text preview: of production) is it bad? No b/c it is financing investment If borrowing is financing investments> generates economic growth, higher income> borrowing not a prob If borrowing is financing consumption> higher interest payments> eventually consumption must be reduced Government Surplus/Deficit = T- G If T>G has surplus, will lend to other sectors If T<G has deficit, will borrow from other sectors Private Sector Surplus/Deficit = S- I If S>I has surplus, will lend to other sectors If S<I has deficit, will borrow from other sectors Net exports = Private Sector S/D + Gov Sector S/D Y=C+I+G+X-M=C+S+I manipulate X-M=S-I+T-G...
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This note was uploaded on 03/08/2009 for the course ECON 20091_ECO taught by Professor Mohammadsafarzadeh during the Spring '09 term at USC.
- Spring '09