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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

real MONEY DEMAND is given by

M d apice / P = kY - hi
k e h sono behavioral numbers