Agent Demand Households Supply Market Goods Services Supply Inputs

Agent: Demand Households Supply Market: Goods/Services Supply Inputs Agent: Demand Firms Robin Naylor, Department of Economics, Warwick 1

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Y 0 X Robin Naylor, Department of Economics, Warwick 30

Y 0 X Robin Naylor, Department of Economics, Warwick 31

Y What equation can we give this constraint? 0 X Robin Naylor, Department of Economics, Warwick 32

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Y 0 X Robin Naylor, Department of Economics, Warwick 35

Y 0 X Robin Naylor, Department of Economics, Warwick 36

Y 0 X Robin Naylor, Department of Economics, Warwick 37

Y 0 X Robin Naylor, Department of Economics, Warwick 38

Y Y* 0 a X* Robin Naylor, Department of Economics, Warwick X 39

Y Y* 0 a X* Robin Naylor, Department of Economics, Warwick X 40

Y What are the ‘relevant parameters’? Y* 0 a X* Robin Naylor, Department of Economics, Warwick X 41

Y Consider a change in money income. How do we show this? Y* 0 a X* Robin Naylor, Department of Economics, Warwick X 42

Y Y* 0 a X* Robin Naylor, Department of Economics, Warwick X 43

Y What can you say about the demand for X as M↑? â Y* 0 And the demand for Y? a X* Robin Naylor, Department of Economics, Warwick X 44

Y â Y* 0 What can you say about the demand for X as M↑? And the demand for Y? a X* Robin Naylor, Department of Economics, Warwick X 45

Y What can you say about the demand for X as M↑? â And the demand for Y? Y* 0 a X* Robin Naylor, Department of Economics, Warwick X 46

Y What can you say about the demand for X as M↑? And the demand for Y? Y* 0 a â X* Robin Naylor, Department of Economics, Warwick X 47

Y What can you say about the demand for X as M↑? And the demand for Y? Y* 0 a X* Robin Naylor, Department of Economics, Warwick â X 48