MGEA06H3 Study Guide - Final Guide: Producer Price Index, Autarky, Net Present Value

• School: UTSC
• Department: Economics for Management Studies
• Course: MGEA06H3
• Professor: Iris Au

Document Summary

Introduction to macroeconomics: a mathematical approach (formulas sheet) => it measures the wholesale cost of fixed basket of good, which includes raw materials, etc. Remark: if expected real interest > actual/realized real interest => borrowers win. Proof: since y = c + i + g + nx and snational = y - c - g. So y - c - g = i + nx. , where n = year to maturity, i = interest rate. Proof: aeplanned (planned aggregate expenditure) = c + iplanned + g + x - im. Aeplanned = (ac + mpc yd) + (ai - d i) + g + x0 - im0. Aeplanned = [ac + mpc (y - t0 + tr0)] + (ai - d i) + g + x0 - im0. = ac + mpc y - mpc t0 + mpc tr0 + ai - di + g + x0 - im0.