多恩布什中级宏观经济学.pdfVIP

Lecture two demand-side equilibrium equilibrium Income and the interest rate in the product market ● product market basic identity: y c y −t y +i +g (1) ( ( )) ① total expenditure as a function of income equals income ② level of investment are exogenous and given. ● Investment demand and the interest rate The level of fixed investment planned by a firm might depend on the market interest rate. ① intuitively, interest rate is the cost of investment. ② Present discounted value theory