Week 5 In-Class Work

Briefly, here are out notes for Problem 4 Pt 1 which was done in class last Monday:

Recorder of the day: Barry

Presenter of the day: Rory

Workers: Tom, John, Rob, Hugh

1.1
The amount of any given expenditures has to balance with incomes/inflows. Put simply, there must be “macro-balance” in each sector.

1.2
For every component in the table there must be an opposite component. There must be an equivalent or a sum of equivalent components. This is because we need to equalise supply and demand and find equilibrium.

Why?

We are aiming to achieve the steady state economy (Pg.63). All consumption required is demanded. Everything taxed is also “returned” with public goods. Using notation from our table:

Cs = Cd Ns-> Nd

Gs = Gd

Ts = Td

Which refer to the following topics in Chapter 3:

Investment function

Consumption Function (3.5, 3.7)

Taxation (3.11)