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CFA Level I MacroeconomicsPresented by: Aditya Ahluwaliawww.finstructor.in
GDP total market value of goods and services produced in a country within a certain time periodTransfer payments not includedUses market value of goods and servicesUses only goods produced within that periodIntermediate goods are not included
Sum of value added and value of final output method
Nominal and Real GDP
Expenditure approach
National income income received by all factors of production that create final output
Personal income pretax income to households
Aggregate demandConsumption Marginal propensity to consume (MPC) and Marginal propensity to Save (MPS). MPC + MPS = 100%Investment Int rates and profitabilityGovernment purchases tax revenue (can be considered independent)Net exports relative prices of goods
IS curve
IS Curve
LM Curve
LM Curve
Aggregate Supply
Shift in aggregate demandIncrease in consumers wealthBusiness expectationsConsumer expectationsHigher capacity utilizationExpansionary monetary policyExpansionary fiscal policyExchange ratesGlobal economic growth
Shift in SRAS
Shift in LRAS
Long run equilibrium
Disequilibrium
Adjustment to increase in demand
Adjustment to decrease in demand
Implications for analysisRecessionary Gap
Implications for analysisInflationary Gap
Implications for analysisInflationary Gap
Stagflation
Labor supplyHuman capitalPhysical capital stockTechnologyNatural resources
Production Function
Business CycleKeynesian school level of optimism of those who run businessesNew Keynesian school downward sticky wagesMonetaristAustrian school government interventionNew classical school changes in technology and external shocks
Economic Indicators
Economic Indicator