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6 Cards in this Set
- Front
- Back
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What is given in a closed, private economy?
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Private= No Government
Closed = No International Trade |
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What two concepts are ignored when calculating DI for a closed, private economy?
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Depreciation
Retained Earnings |
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Real GDP = ?
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DI = C+Ig
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What is the "mx+b" equation for Consumption?
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m = MPC
x = Real GDP = Q Ca = autonomous consumption |
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What is autonomous consumption?
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• Consumption expenditure that occurs when income levels are zero (MPC = 0)
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What is different about the graphs of (1) the investment demand curve and (2) the investment schedule?
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(1) • Linear downsloping demand curve (Investment on X-axis, Real Interest Rate on Y-axis)
(2) • Linear line at the amount of investment determined in (1) to the various levels of GDP (Thus, (1)'s investment on Y-axis, Real GDP on X-axis) |
