Macro Economics - Macro-Economic Notes: 2/2/11 Determinants...

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Macro-Economic Notes: 2/2/11 Determinants of household (class) Demand (The five) Population Income (inferior or normal) Prices of related products (substitute or compliment) Taste and Preferences Expectations (with respect to future income, wealth, and prices) “Law” of supply quantity supplied The quantity supplied - units a firm would be willing and able to offer for sale (positive slope) Market Equilibrium: price and supply quantity both went up! Changes in quantity supplied vs. changes in supply: IMPORTANT DISTINCTION! Changes in quantity supplied versus Changes in supply From pizza going UP, means an increase in quantity supplied An increase in supply, will lead to pizza going DOWN.
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Macro Economics - Macro-Economic Notes: 2/2/11 Determinants...

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