Chear Macro

For all graphs the green is after the change

Monetary Policy

Fiscal Policy
1. Budget policy: ↓budget↑ + ↓bonds↑.
2. Tax policy: ↑T↓ + ↓bonds↑.
3.Balanced policy: ↓budget↑ + ↓T↑.
(multiplier)*(fiscal change) = change in Y

z

Itamar Rosen
250-4606046 C

% of change=rate of change= (new-old)/oldRequired Reserve Ratio = reserves/deposits
Money multiplier: 1/Required Reserve Ratio
Excess Reserve= cash in reserves over the required .
Added value =sales + inventory - cost(exlc.wages&profit)
Distribution of end use=how were the products consumed: consumption \ investment (within
other products are notcounted)
GDP=production in the geographical borders of the country(incl. foreign workers,excl.
citizens working abroad)
GNP=production of thecitizens(incl.citizens working abroad,excl.foreign workers)
GDP per capita=GDP/population
NPV(net present value )=present value of income – investment
Present value ofincome=x/(1+r)^n
Externalities: Tax\subsidy=external damage\utility
Msc(marginal social cost)=mc of business+ external damage\-external utility
Public goods -for each Q do P+P
Private goods – for each P do Q+Q
At Equilibrium: AD= Y = income
open economy: Ad= C+I+G+Ex-Im & I=s+im-ex
closed economy: AD=C+I+G &I=S
S≡ Yd-C
Deflation gap=production gap/Keynesian multiplier
Production gap= Yf –Y0
Injection/Leakage approach equilibrium: S + T= I + G
MPC = ∆C/ ∆Y.MPS = ∆S/ ∆Y. MPS= 1-MPC
Yd=(Y-T). C= C0 +MPC *Yd. S=S0+MPS*Yd. S0=-C0
APC=C/Yd. APS=S/Yd. APS+APC=1
Welfare tranfers/cuts = lowering/increasing taxes