Flashcards in M acro Deck (38)
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1
Y
GDP
2
C
aggregate consumption
3
I
investment
4
G
Government spending
5
NX
net exports
6
Yd (d come apice) e formula
Disposable income
Y + Tr - Ta
7
Tr
(gov) transfer to the private
8
Ta
Total taxation
9
Sp
Private savings
10
BD
(Gov) budget deficit
11
Sg
è inverso a?
government savings
inverso a BD
Sg= - BD
12
AD
aggregate demand
13
P
price level
14
K
physical capital stock
15
AS
aggregate supply
16
M
offerta di moneta
17
L
domanda di liquidità
18
wage equation
W = PAF u(-) z(+)
19
real wage equation
W/P = AF u(-) z(+)
20
in the Short-run:
– prices are
– output is determined by
– unemployment is ____ related to ___
Short-run:
– prices fixed
– output determined by aggregate demand
– unemployment negatively related to output
21
Consumption function
C = C con la barretta sopra + c YD(apice)
Ccon la barretta sopra > 0
0 < c piccola < 1
22
disposable income
YD(apice) = Y +Ta -Tr
23
c piccola
marginal propensity to consume
24
C grande con la barretta sopra
autonomous consumption
25
Investment function
I = Icon la barretta sopra - br
I con la barretta sopra > 0
b maggiore o = di 0
b < infinito
26
I
Investment in physical (fixed) capital
27
I grande con la barretta sopra
Autonomous investment
28
b
Sensitivity of investment with respect to r
29
r
given by...?
Real interest rate, given by r = i - p greco e(apice)
30
p greco e(apice)
Expected inflation rate
31
i
Nominal interest rate
i = r +p greco e apice
32
Fiscal policy
G =G con la barretta; G con la barretta > 0
Tr = Tcon la barretta r ; Tcon la barretta r> 0
Ta = Tcon la barretta a , Tcon la barretta a > 0;
or Tcon la barretta a =tauY, tau > 0
33
Aggregate demand definition and equilibrium condition in a CLOSED ECONOMY
AD =(con tre linee) C + I + G
Y= AD
34
The IS curve shows _____
The IS curve shows all the combinations of r and Y
that result in goods market equilibrium
35
The equation for the IS curve is
Y = A con la barretta + c piccola Y - br
36
A con la barretta
autonomous aggregate demand
A con la barretta = C con la barretta + c (Tcon la barretta r - T con la barretta a ) + I con la barretta + G con la barretta.
37
MONEY DEMAND
People demand money for making transactions, covering
unexpected needs and choosing the desired portfolio
composition
38
