ECON 1202 Study Guide - Final Guide: Commodity Money, Great Moderation, Government Spending

• School: UConn
• Department: Economics
• Course: ECON 1202
• Professor: All

Document Summary

Chapter 10: economic growth the financial system, and business cycles. Chapter 11: long run economic growth: sources and policies. Chapter 14: money, banks and the fed. Chapter 17: inflation, unemployment and fed policy. Savings equals investment: savings must equal investment, s = i, when spublic is zero, the government spends as much as it brings in; this is known as a balanced budget. Negative and positive values for spublic are known as budget deficits and budget surpluses respectively: since the federal government finds its current deficits with borrowing, this takes away from the money available for investment spending. In the business cycle, we see that interest rates increase during expansionary times and decrease during recessionary times: expansionary time: Demand for loanable funds shifts to the rights. Interest rates increase: households supply loanable funds to firms, provide more when firms offer a greater reward for delaying consumption. An increase in the demand for loanable funds.