ECON 3 LECTURE NOTES - Econ 3: 1. Real GDP in 1900=$2000...

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Econ 3: 1. Real GDP in 1900=$2000 and grew at a 1 percent annual rate, what would real GDP per year equal 100 years later? $5,410 2. Real GDP per person equals average labor productiviety, the share of population employed. 3. If 50 percent of the population in a country is employed and average labor productivity equals 30,000 then real GDP per person equals 4. College degree = investing in human capital. 5. Value of MPL = Price multiples by the MPL. Savings = current income – spendings on current needs. Balance sheet. Asset and liabilities Saving rate = savings/current income Stocks is an asset Capital loss: a decrease in value of asset on pretty much anything, such as stocks houses etc. Stock vs Flow o Saving is a flow it is measured over a time period o Wealth/network is a stock because it is measured in a current time. Change in wealth: savings + capital gain – capital losses National savings o Measure GDP AND INCOME o Y= c+i+g o Current needs include C, G
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o But don’t include investments o National savings = income – consumptions and government spendings. Public and private savings o Net taxes = taxes-transfers(social security) – payment on government debt. o Public savings = taxes minus government spendings o Private savings = income – taxes – consumptions Midterm Review 25 multiple choice questions and 5 short answers. Chaptre 16-19
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ECON 3 LECTURE NOTES - Econ 3: 1. Real GDP in 1900=$2000...

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