ECN 204 Lecture Notes - Lecture 1: Technological Change, Demand Curve, Fisher Equation
Document Summary
Demand pull demand increase, supply could stay price increase. Cost push infl increase in production. The more you save in the present, the more consumption: changes in consumer preferences affect consumption, why would increase in investment increase gdp by more than 100, because of multiplier. C + s = di -> whatever you don"t save, you consume. Dissavings can occur you"re incurring more than you save. Green area what is being saved. Point where the consumption and savings = 0 savings. Marginal propensities = for every dollar you get, you consume a certain percentage of it. Percentage rate you use new old / old. (new old)/ (new income old income) * on slide 7 10) mps = 0. 25 = 40 35 / 550 530: slope = rise/run, if slope is given, you are given the marginal propensity to consume. Consumption + savings = disposable income: wealth assets liabilities.