文档介绍：Chapter 3:The Goods Market
3-1:position of GDP
3-2:The Demand for Goods
3-3:The Determination of Equilibrium Output
3-4:Investment Equals Saving:An Alternative Way of Thinking About Goods-Market Equilibrium
3-5:Is the Government Omnipotent?A warning
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Figure 1:Production,e, and the Demand for Goods
Production
e
Demand
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3-1:position of GDP
●The ponent of GDP is consumption,(C)
●Investment (I) is sometimes called fixed investment to distinguish it form inventory investment.
•Nonresidential investment
• Residential investment
●Government spending,(G)
• Not include government transfers
●Net exports(X-Q) is the difference between exports(X) and imports(Q).
●Inventory investment(IS) is the difference between goods produced and goods sold in a given year.
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position of ,1998
Billions of Dollars
Percent of GDP
GDP(Y)
1 Consumption(C)
2 Investment(I)
Nonresidential
Residential
3 Government Spending(G)
Exports
Exports(X)
Imports(Q)
5 Inventory Investment(IS )
8509
5806
1308
939
369
1488
-154
958
-1112
61
100
68
15
11
4
18
-2
11
-13
1
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3-2:The Demand for Goods
Consumption (C)
Investment (I)
Government (G)
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The Demand for Goods
Z≡C+I+G+X-Q
If The Economy is closed,then
Z≡C+I+G
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Consumption(C)
C=C(YD)
(+)
YD is disposable e
C= c0+c1YD ()
c1 is called the marginal propensity to consume
c0 is autonomous consume
YD ≡ Y-T
C=c0+c1(Y-T) ()
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Figure: Consumption and Disposable e
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Investment (I)
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Government (G)
G describes fiscal policy—the choice of taxes and spending by the government.
Government do not behave with the same regularity as consumers or firms. So there is no reliable rule we could write for G or T corresponding to the rule we write for consumption.
One of the tasks of macroeconomists is to advise governments on spending and tax decisions. That means we do not want to look at a model in which we have alre