ECON 104 Lecture Notes - Real Interest Rate, Ceteris Paribus, Nominal Interest Rate
Document Summary
Should cut the debt: fiscal drag, two examples of relevance, subsidize student loans. Cut spending: raise minimum wage (compare costs and benefits) Positives- move poor americans above poverty line, reduce turnover costs and increase productivity, increasing wage would keep minimum wage salary up with inflation. Chapter 1- economics: foundations & models (no such thing as a free lunch) The economy is doing ok. we need to close the output gap and create jobs for workers: the debt is huge. We need to increase taxes and cut spending. Consumers and firms use all available information as they act to achieve their goals. You go see a movie for and it was awful. Exante (before)= >7 and expost (after)= <7: people respond to economic incentives. Pay by the hour and not by something else: optimal decisions are made at the margin. Marginal analysis- rational people compare mc and mb.
