Lecture 13

Lecture 13 - Econ 102 Fall 2008 Lecture 13 Keynesian...

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1 Econ 102 Fall 2008 Lecture 13 Keynesian Economics
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2 Topics Keynesian economics Aggregate Demand Aggregate Supply
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3 Definitions This is the dollar value of expenditure on goods This is the dollar value of consumption expenditure This is the dollar value of government expenditure Y G C Y C G = + Every dollar is spent by the household on consumption or by the government We will abstract from investment
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4 Definitions This is the money wage This is total employment This is the profit earned by firms w L Π
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5 Definitions Income equals expenditure wL Y + Π = Wage income Profit income Expenditure Income
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6 Income Equals Expenditure 45º Expenditure Income
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7 Disposable Income is disposable income is the income tax rate D Y τ ( 29 1 D Y Y = -
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8 The Government Budget is government debt is the interest rate means “the change in” B i B G Y iB τ ∆ = - + This is called the primary budget deficit This is the budget deficit (as reported in newspapers)
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9 The Consumption Function D C a bY = + Consumption expenditure Autonomous consumption Disposable income The marginal propensity to consume
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This note was uploaded on 09/27/2009 for the course ECON 102 taught by Professor Serra during the Fall '08 term at UCLA.

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Lecture 13 - Econ 102 Fall 2008 Lecture 13 Keynesian...

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