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Chapter 8 Notes FULL lecture notes for Chapter 8

9 Pages

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ECON 102
Angela Trimarchi

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Econ 102 Chapter 8 NotesProf Angela TrimarchiChapter 8Saving and InvestmentRecallIncome Expenditure IdentityGDP Y CIGXMAssume that XM then GDP Y CIGClosed economy one that does not trade and doesnt have external links with the rest of the worldWe can rearrange the above equation to solve for IIYCGWe can subtract and add government taxes T to the right hand side of the above equationIYCTGT YCTTGTherefore the two main terms are the followingYCTprivate savingTGpublic savingThereforeIprivate savingpublic savingGovernment BudgetRecallTGpublic savinggovernment budgetTTax revenueGGovernment spendingIf TG0 then there is a budget surplus and public savingIf TG0 then there is a budget deficit and public dissavingRecall Expression for I once againIY CGYCG is also equal to national savings symbol for national savings is SFinancial Markets Bond MarketStock Market
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