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Unformatted text preview: Our national debt is funded by foreign sources. Everything stays in Macro Equilibrium as long as Injections = Leakages we are ok as long as we are offset equally example: Import ≠ Exports Import > Exports Saving = Investment by Companies Saving < Investment by Companies Taxes = Government Spending Injection > Leakages a possibility of Inflation Injection < Leakages a possibility of Resection Measurement Problems 1) Non –Market Activity (home labor) 2) Unreported income (underground economy) 3) International Activity 4) Environmental factors 2/3 comes from legit sources. Real GDP vs. Nominated GDP To compare years we have to use Real GDP. GDP = P x Q (produce more stuff or charge more for the stuff)...
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This note was uploaded on 09/09/2011 for the course ECON 104 taught by Professor Dolenc during the Fall '08 term at UMass (Amherst).
- Fall '08