ECON 101 Lecture 8: Econ Unit 1 SG

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4 Apr 2016
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Individuals (consumers and workers) max utility: utility economic satisfaction, firms max profit, revenue money brought in, profit money left after expenses, market share, earn rewards and recognition. Investment sector business spending = 15: growth promoting. Inventory investment end of the year, company buys back all unsold items so they can be counted in economic output / gdp i. 1. net investor to net debtor in the world during 1970s: ca < 0, fa > 0, c + i + g + xn = total spending. Classical economy markets work best when left to themselves. Chicago institute based on efficient market hypothesis. Monetary policy less distortionary, price of money and interest rates. Individual property / freedom: freedom of control over resources. There will be failure in the market system caused by externalities. Cannot avoid problems or collapses in demand. Fiscal policy taxing, incentivization, regulation authority, rebates, subsidies, tax breaks: federal reserve self-funded conductor and monitor of monetary policy.

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