ECON 1BB3 Chapter Notes - Chapter 16: Autarky, Tax Credit, Demand Curve
28 Oct 2018
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ECON 1BB3 Full Course Notes
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Sp=y-t-c o y=income: c=consumption o t is taxes minus transfers. Sg=t-g t is bigger, running a surplus g is bigger, running a deficit. Distributing prohibited | downloaded by arsen terzian (arsen98@gmail. com) lomoar cpsd|2151316: y-c-g=i national savings o s=sp+sg, s=y-t-c+t-g, s=y-c-g savings equal investments in a closed economy. Funds we are saving which others are borrowing. Demand and supply: slope and shift demand, negative slope o only borrowers are firms, not true in real economy o interest rate rises, borrowing more costly, investment spending by firms goes down. Supply o positive slope: households: higher interest rate=every dollar saved now=more future consumption public saving does not get affected by interest rate. How much firms want to invest will impact demand curve only (anything that affects investment: investment tax credit: shifts to the right when repealed shifts to the left. How much households are saving or government is saving will affect supply (anything with public and private savings)
