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Unformatted text preview: 1 Determinants of the Level of Real Interest Rates z Societal Preferences z Societal Preferences The more present oriented are societal preferences, the higher the market r Shifts borrowing curve out z Societal Endowments The more present oriented are societal endowments the lower the market r ECON 422:Fisher 48 R.W.Parks/E. Zivot endowments, the lower the market r Shifts lending curve out z Productive Opportunities [see later] II. Intertemporal Production (Real Investment) and Exchange: Outline Exchange: Outline A. Individual optima B. The Fisher Separation Theorem C. Market equilibrium ECON 422:Fisher 49 R.W.Parks/E. Zivot 2 An Intertemporal Production Function Shows the Relationship Between Inputs Today and Outputs in the Future I Outpu Output Q Q 1 F(I) Note: slope of F(I) is called the marginal ECON 422:Fisher 50 R.W.Parks/E. Zivot Io I 1 Input rate of transformation (MRT) From Production Function to Fisher Diagram z Reverse the production function around z Reverse the production function around...
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This note was uploaded on 12/21/2011 for the course ECON 422 taught by Professor Staff during the Fall '08 term at University of Washington.
- Fall '08
- Interest Rates