MATH 3281 Study Guide - Final Guide: Market Basket, Real Wages, Disposable And Discretionary Income

• School: York University
• Department: Mathematics and Statistics
• Course: MATH 3281
• Professor: Dr.

Document Summary

= wages + interest + rent + profit + (indirect taxes subsidies & depreciation) Recession: negative growth of real gdp for at least 2 quarters. When: 1. unemployment is frictional and structural, 2. unemployment rate=natural unemployment rate, 3. real gdp=potential. Inflation rate: % change in price level (% change in cpi from 1 period to the next) Gdp deflator : ratio of nominal gdp to real gdp. Cpi= (cost of cpi basket at current period price/ cost of cpi basket at base year prices ) *100. Inflation rate=( cpi this year cpi last year / cpi last year) *100. Potential gdp las & sas curves shift to the right. Expected future income, expected inflation rate, expected future profit aggregate demand. Stagflation: combination of rising inflation rate and falling real gdp. Disposable income= real gdp- net taxes yd=y t yd=c+s (consumption + saving) Mpc= c / yd (slope of a consumption function) Mps= s / yd (slope of the saving function)