Class Notes (839,146)
Canada (511,218)
Economics (685)
ECO100Y5 (345)
Lecture

econ-macro class 3 (what he said)

10 Pages
129 Views

Department
Economics
Course Code
ECO100Y5
Professor
Sherry Fukuzawa

This preview shows pages 1,2 and half of page 3. Sign up to view the full 10 pages of the document.
Description
- government gives money and also takes money - tax-subsidy= net taxes - income-net taxes=net income - t=net tax rate - government tax - government get's more tax then it spends - budget defecate - taxes it receives = the taxes it receives (called balanced budget) - trade sector - exports-imports= - depends on the output (how much money they make) the more they make the more they buy - how much we buy from foreign countries depends on domestic output - depends on the marginal propensity to import - percentage of income will be spent on foreign goods because we cannot produce those outputs - Nx= Ex-IM = Ex(depends on domestic output)-MpMxY (depends on domestic output) - export is autonomous-does not depend on domestic income (given level) - Imports depends on Income, the slope is marginal propensity to import - changing of the curves - increase in foreign income will increase domestic output - price level in Canada rises-everything becomes more expensive not just to domestic buyers but also to foreign buyers - our export will drop due to this - export curve will shift down - domestic buyers...now foreign goods become relatively cheaper then before, so we would buy more at every level of income (domestic goods are more expensive) - that means an increase in MPM; IM is steeper - when we incorporate changes in Canada only, then the export will decrease and import (MPM) will increase - net export curve will become steeper - rise in price level domestically will lower export and increase import and net export will deteriorate and drop (before it was positive-look at pic) - exchange rate - what is the interest of exchange rate - if 1 Canadian dollar= 1 US dollar then it doesn't matter - so if exchange is the same, 1 dozen eggs=$4; if the americans eggs cost $2 they will not buy from canada - on the other hand Canadians will buy from the US, thus America's export goes up and import goes down...vise versa for canada - with exchange rate - Canadian dollars depreciated-means that each US dollar can get more Canadian dollars - thus 2 Canadian dollars =1 US dollar - so if they get from Canada, goods would be cheaper then Canada's - thus Canadian export increases - on the other hand import of eggs from the US will drop for canadians - over the last 10years, - US and China-US want the Chinese currency to appreciate so that US depreciates - when RMB becomes more valuable - when EX goes up, Import goes down-thus export curve shifts up (becomes cheaper to Chinese buyers)- at the same time MPM drops - thus cou
More Less
Unlock Document

Only pages 1,2 and half of page 3 are available for preview. Some parts have been intentionally blurred.

Unlock Document
You're Reading a Preview

Unlock to view full version

Unlock Document

Log In


OR

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


OR

By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.


Submit