曼昆《宏观经济学》(第五版)课堂讲义(英文)Ch03.pptVIP

* * Chapter Three A PowerPoint?Tutorial to Accompany macroeconomics, 5th ed. N. Gregory Mankiw Mannig J. Simidian ? CHAPTER THREE National Income: Where It Comes From and Where It Goes Copyright 1997 Dead Economists Society A quite simple but powerful analytical model built around buyers and sellers pursuing their own self-interest within rules set by government . It’s emphasis is on the consequences of competition and flexible wages/prices for total employment and real output. Its roots go back to 1776 in Adam Smith’s Wealth of Nations. The Wealth of Nations suggested that the economy was controlled by the “invisible hand” whereby the market system, instead of government would be the best mechanism for a healthy economy. The heart of the market system lies in the “market clearing” process and the consequences of individuals pursuing self-interest. In this module, we will develop a basic classical model to explain various economic interactions. Proceed to the next slide to the “CLASSICAL FACTORY” to learn how to construct the classical model. P Q P* Q* S D The place where classical model mechanics are made easy! Welcome to... We begin with firms and see what determines their level of production and thus, the level of national income . Then, we examine how the markets for the factors of production distribute this income to households. Next, we consider how much of this income households consume and how much they save. We will also discuss the demand arising from investment and government purchases. Finally, we discuss how the demand and supply for goods and services are brought into balance. An economy’s output of goods and services GDP depends on: quantity of inputs ability to turn inputs into output Let’s go over both now. L K The factors of production are the inputs used to produce goods and services. The two most important factors of production are capital and labor. In this module, we will take these factors as given hence the overbar depi