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Unformatted text preview: rized by the existence of a level of aggregate output (which equals aggregate income) such that aggregate output equals aggregate expenditures.
Notation, macroeconomic equilibrium is the level of Y such that Y = C + I + G + NX
Econ 1 review, continued
Consumption (C) increases with disposable income (YD), though the change in consumption is generally less than the corresponding change in disposable income
C = C0 + CyYD where Cy is the mpc and 0 < Cy < 1 Administrative Matters Overview of Course Review of Economics 1 Administrative Matters Overview of Course Review of Economics 1 Econ 1 review, continued
The process of adjustment to macroeconomic equilibrium is an output adjustment process Administrative Matters Overview of Course Review of Economics 1 6...
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This note was uploaded on 02/04/2011 for the course ECON 100B taught by Professor Wood during the Fall '08 term at University of California, Berkeley.
- Fall '08