ECO102H1 Lecture Notes - Lecture 13: Parsec, Dae Dae, Pessimism
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Potential gdp y all factor production employed at normal utilization levels. I natural unemployment y y inflationarygap expansion low unemployment high increasing inflation yay recessionang gap high unemployment low decreasing inflation. Vs recession if zt quarters with a decrease in real gdp canoccur even when in inflationary gap. Explain how get in sth into in gdp large out of recession. T slope x yeq yeq ye0 t slope nine. Prices bar interest rate fixed in sr don"t depend on current real gdp e planned aggregate expenditurei howmuch want to spend constant. E t c ytik. it nogovernment in simplest model no eg. ci 30 t o 8yd not w. C mpc marginal propensity to consume mpsil mpc. in clued expenditure s. Gdp spend more than income income i amount of money youget wealth value of privately owned asset house stock bonds i wealth i spending. Private investment function current cost vs interest rate real i. I planned t unplanned changes wrv happened bysurprise.
