Developing a Macro Model -- Introduction

Developing a Macro Model -- Introduction - Econ 1021 Fall...

Info iconThis preview shows pages 1–6. Sign up to view the full content.

View Full Document Right Arrow Icon
    Developing a Model of the  Macroeconomy – Introduction  Outline 1. 2. The Macroeconomy’s Circular Flow a) hh and firms b) Incorporate govt and foreign sectors 3. Further consideration of the equilibrium conditions a) b) 4. A rough ‘road map’ Econ 1021 Fall 2009 Reading:   pp. 115-118, 203-212, 250-252  from Macroeconomics in Context
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
    Output ( Y ) Income ( Y ) Spending (Aggregate Demand or AD ) Spending stimulates firms to produce Production generates incomes Incomes give actors the ability to spend The Macroeconomy’s “Circular  Flow” Equilibrium a set of “prices” in the macroeconomy such that Y = output = income = expenditures Y = AD Does Y = Y* in equilibrium???
Background image of page 2
   
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
    Expenditures – the Aggregate Demand  Firms’ plans may not be realized Intended investment ( II) – the quantity of  investment that firms  plan  to make over the  upcoming calendar period. “investment” = residential investment + nonresidential investment + inventory investment Intended investment (II) is one component of  aggregate demand AD = C + II + G + NX
Background image of page 4
    Production generates income to
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 6
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 12/03/2010 for the course ECON 1021 taught by Professor Lang during the Spring '10 term at UChicago.

Page1 / 14

Developing a Macro Model -- Introduction - Econ 1021 Fall...

This preview shows document pages 1 - 6. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online