CAS EC 102 Lecture Notes - Lecture 15: Aggregate Demand, Savings Account, Real Interest Rate

• School: Boston University
• Department: Economics
• Course: CAS EC 102
• Professor: Bruce Watson

Document Summary

Not what we mean in ordinary language. Buying a share in a small business. None of them add to the gdp. None of these activities are directly involved in production of goods and services. Consists of 17. 2% of 2016 us real gdp. Nonresidential, including structures, equipment, and intellectual property products. About 77% of all investment in 2016. About 21% of all investment in 2016. Unfinished goods still in the production process. If firms add b to their inventories. Stuff firms have produced but not yet sold. Stock of raw materials firms have bought but not yet used. Firms sell, use, or finish b worth of stuff. b - b = b. About 2% of all investment in 2016. Investment is the most volatile component of aggregate expenditure. Continuously increasing until 2009 (huge drop) but increasing again afterwards. Investment = change in capital = k.