ECON 2002.01 Study Guide - Midterm Guide: Real Business-Cycle Theory, Financial Intermediary, Aggregate Supply

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Published on 26 Oct 2016
Ohio State University
ECON 2002.01
Study Guide Macro AU14 Midterm 2
Economic Growth, Financial System, Business Cycles
Business cycle
Long run economic growth
Growth rate
Year t year t-1/year t
Rule of 72
72/GR = years to double
Determinants of long run growth
Increase in labor productivity; increased cap/labor hour or tech
Labor productivity
Potential or full employment GDP
Financial system
Retained earnings, stocks & bonds
Financial market
Financial intermediary
Banks, pension funds, insurance
Relationship between savings and investment
In closed economy, savings = investment
Y = C + I + G; I = Y C - G
S = spub + Spriv
Public savings
Sb = T TR - G
Private savings
Sv = Y + TR C - T
Loanable funds market
Crowding out
Peak, trough
Recovery, expansion
Effects of real business cycle
Solving for savings and investment
Loanable funds market analysis
Calculation of growth rates
Long Run Economic Growth
Determinants of economic growth rates
Human capital
Causes of slow economic growth
Policies for economic growth
Foreign direct investment
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