AS.180.101 Lecture Notes - Lecture 14: Demand Curve, Deflation, Xm Satellite Radio
Document Summary
Lecture #14: changes in income and multiplier process. Wholesale gas prices: range where gasoline prices have been, averaged . 85/gallon. Y = c + i + g + (x-m) Data out of europe and china is very disappointing! We have to look at x m and think about exports and imports. If we are exporting to china, but china is weak, we will lower our expectation for exports. When we compete to sell, we compete based on the price of us good versus price of goods in europe. That price is affected by the value of a dollar. If the dollar goes up 10% versus the euro, that means the price of. Overall we think exports will be lower and imports will be higher. So even though consumption will be better we think because of net exports dragging gdp, we will be in a weaker place. C is up, and n - m: other piece the cpi will be weaker.
