Beruflich Dokumente
Kultur Dokumente
Macroeconomic Theory I
ECON222
Fall 2017
Macroeconomic Theory I (ECON222) Consumption, Savings & Investment Fall 2017 1/8
Goods market equilibrium in a closed economy
The real interest rate adjusts to bring the aggregate quantities of
goods/services produced and desired into balance
Macroeconomic Theory I (ECON222) Consumption, Savings & Investment Fall 2017 2/8
The savings-investment diagram
Macroeconomic Theory I (ECON222) Consumption, Savings & Investment Fall 2017 3/8
r S(r)
r1
I(r)
Macroeconomic Theory I (ECON222) Consumption, Savings & Investment Fall 2017 4/8
Shifts of the saving curve
Macroeconomic Theory I (ECON222) Consumption, Savings & Investment Fall 2017 5/8
r
S
(r)
S(r)
r2
r1
I(r)
d
Sd2= I 2 S1d = I1d d
S, I
d
Macroeconomic Theory I (ECON222) Consumption, Savings & Investment Fall 2017 6/8
Shifts of the investment curve
Macroeconomic Theory I (ECON222) Consumption, Savings & Investment Fall 2017 7/8
Why are real interest rates currently so low in Canada?
Macroeconomic Theory I (ECON222) Consumption, Savings & Investment Fall 2017 8/8