chAClosedEconomyOnePeriodMacroModel(中级宏观经济学,香港中文大学)剖析.pptVIP

Chapter 5A Closed-Economy One-Period Macro Model The Model The economy that we consider is a closed economy, i.e. one that does not trade with other economies. Besides representative consumer and representative firm, there is an additional agent: the government. Government The only action of the government is to implement fiscal policy. Fiscal policy refers to the government’s choices over its expenditures, taxes, transfers and borrowing. The Government Suppose the government wishes to purchase a given quantity of consumption good, G. Since there is only one period, the government cannot