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• government deficit do not matter under some conditions. 
• taxation by government has no effect

Positively related. interest rate tracks inflation.

nominal interest rate minus inflation

CA=net exports + net factor payments

Government surplus and and current acount surplus move in opposite directions. 

Rederal Reserve System

The negative of government surplus

taxes minus spending

government active role to smoth business cycles

GDP+NFP

# unemployed/labor force

total spending on final goods

negative govnm surplus

all incomes received within a nation

price level change during one period

sum of value of goods and services

when S and L are perfect complements to each other

additional unit which can be produced by one additional unit of input

• Marginal product of labor declines in the sides
• It increases when capital or labor increases or productivity

it sets MPN equal to the real wage.

a tax that is unaffected by the actions of the cobnsumer or firm being taxed.

income up = consumption up

• negative slope of the PPF. Rate at which one good can be converted to another.
• MRT= - slope PPF

cannot make sb better off without making another worse off

shifts PPF down by amount spent. Negative effect on L and C so they both fall and unemployment rises. 

the relationship between the tax revenue collected by the government and the tax rate

Current income up =  C up = C' up = S up

Future income up = C up =C' up.

reduction of prices in the future. so consumption less today, more in the future

taxes change does not affect consumers consumption

return on savings in units of consumption goods.