ECON 1BB3 Lecture Notes - Government Budget Balance, Statics
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February 4th, 2013 Econ 1BB3 Notes
Remember: Print out handout for tomorrow’s class
Is a government budget deficit bad for the economy?
Demand: Negative relationship between investment and the interest rate.
Supply: Positive relationship between saving and the interest rate.
-Anything that affects investment (other than the interest rate)
-Anything that affects private saving (other than the interest rate)
-Anything that affects public saving
1. Comparative Statics Example: (SEE SHEET)
In the following cases, use a market diagram to show what happens to the
demand and/or supply curves.
What happens to the interest rate, investment, national saving, private
saving, and public saving?
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