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Real GDP
Real GDP

... government borrowing, and foreign borrowing. Government purchases of goods and services (G) are paid for by tax revenues and any government borrowing. Exports (X) generate an inflow of funds into the country from the rest of the world, but imports (IM) lead to an outflow of funds to the rest of the ...
PS11_ANSWERS
PS11_ANSWERS

... We know Y = 5, T = 1.5, Sprivate = 0.5 = Y - T - C, Spublic = 0.2 = T - G. Since Sprivate = Y - T - C, rearranging gives C = Y - T - Sprivate = 5 - 1.5 - 0.5 = 3. Since Spublic = T - G, then rearranging gives G = T - Spublic = 1.5 - 0.2 = 1.3. S = national saving = Sprivate + Spublic = 0.5 + 0.2 = 0 ...
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Document

... • Now, I’m all for including the banking sector in stories where it’s relevant; – but why is it so crucial to a story about debt and leverage?...” • Neoclassical “Loanable Funds” model ignores banks – “If I decide to cut back on my spending and stash the funds in a bank, which lends them out to some ...
Krugman & Wells Chapter 23 PPT
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...  Measures to deal with layoffs and unemployment – Re-train laid-off labor force for reemployment in desired sectors ...
Background Notes and Methodology - National Income and Expenditure (PDF 47KB)‌
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is there a role for an active fiscal stabilization policy?

... literature the level of activity is supply determined. Accordingly the transmission mechanism of fiscal policy comes to run via supply incentives. In the often considered closed economy model with "one good and no capital", this implies that labour supply takes centre stage. An expansion of public c ...
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... only a great economist but was aware of the political danger the depression posed to capitalism  he realized that it would be difficult to convince consumers and businesses to spend more in the depths of a recession  he emphasized the importance of uncertainty and expectations on behavior ...
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... the level in Prince Edward Island. Reallocation of factors of production (including employees) from low-productivity activites and regions to high-productivity ones can thus contribute significantly to national productivity growth. But the author points out that interprovincial migration has trended ...
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... performance in this period. On the primary expenditures side, the increase in public investment expenditures was particularly noteworthy, while on the revenues side, tax revenues as well as non-tax revenues like privatization revenues had an upward trend. Hikes in tax rates in September 2012 and ear ...
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Fiscal multiplier

In economics, the fiscal multiplier (not to be confused with monetary multiplier) is the ratio of a change in national income to the change in government spending that causes it. More generally, the exogenous spending multiplier is the ratio of a change in national income to any autonomous change in spending (private investment spending, consumer spending, government spending, or spending by foreigners on the country's exports) that causes it. When this multiplier exceeds one, the enhanced effect on national income is called the multiplier effect. The mechanism that can give rise to a multiplier effect is that an initial incremental amount of spending can lead to increased consumption spending, increasing income further and hence further increasing consumption, etc., resulting in an overall increase in national income greater than the initial incremental amount of spending. In other words, an initial change in aggregate demand may cause a change in aggregate output (and hence the aggregate income that it generates) that is a multiple of the initial change.The existence of a multiplier effect was initially proposed by Keynes student Richard Kahn in 1930 and published in 1931. Some other schools of economic thought reject or downplay the importance of multiplier effects, particularly in terms of the long run. The multiplier effect has been used as an argument for the efficacy of government spending or taxation relief to stimulate aggregate demand.In certain cases multiplier values less than one have been empirically measured (an example is sports stadiums), suggesting that certain types of government spending crowd out private investment or consumer spending that would have otherwise taken place. This crowding out can occur because the initial increase in spending may cause an increase in interest rates or in the price level. In 2009, The Economist magazine noted ""economists are in fact deeply divided about how well, or indeed whether, such stimulus works"", partly because of a lack of empirical data from non-military based stimulus. New evidence came from the American Recovery and Reinvestment Act of 2009, whose benefits were projected based on fiscal multipliers and which was in fact followed - from 2010 to 2012 - by a slowing of job loss and private sector job growth.
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