econ ch3

econ ch3 - The Short Run: part II The goods market (Ch. 3)...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
The Short Run: part II The goods market ( Ch. 3) Prof. Davide Debortoli UCSD Econ 110A – Spring 2011 Outline ! The demand for goods in the real world ! The components of GDP ! Building a model for the Goods market ! The equilibrium in the Goods market ! Derivations ! Graphical representation ! Some experiments ! A change in consumer confidence ! Change in gov’t expenditure ! The saving paradox
Background image of page 1

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

View Full DocumentRight Arrow Icon
Who buys the goods produced ? Billions of US $ % of GDP GDP (Y) 14,526 100.0 Consumption (C) 10,245 70.0 Investment (I) 1,728 11.9 Non Residential 1390 9.6 Residential 338 2.3 Government Spending (G) 3,003 21.0 Net Exports - 516 -3.5 Exports (X) 1,840 12.7 Imports (IM) -2,356 -16.2 Inventory investment 70 0.5 Foreign sector Domestic sector Putting it all together Z " C + I + G + X # IM Symbol Meaning Z Aggregate Demand C Private Consumption I Fixed Investment G Government Expenditure X Exports IM Imports
Background image of page 2
Economic models: Main features ! Reality is too complex …w e need to simplify. 1. Make assumptions (simplifications, to some extent irrealistic) 2. Test implications / predictions ! … a never ending “loop” between 1 and 2. ! The ingredients of an economic model
Background image of page 3

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

View Full DocumentRight Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 10/17/2011 for the course ECON 100 taught by Professor Hnewhous during the Spring '08 term at UCSD.

Page1 / 9

econ ch3 - The Short Run: part II The goods market (Ch. 3)...

This preview shows document pages 1 - 4. Sign up to view the full document.

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