Oct 21 2022

OK. Discussion. Find an answer. With questions. The main. Involved. The demand for imports of
factors. And we were discussing. Close. For labor and for capital is demand depends form 2.
Elements which are large over the type. Or. Prices. Wages. And friends in that case. So this is going
to be. All these. Wants to change its profit then. You can change revenue. Because. Finance and
services. Presented even firmer wants to maximize the problem. Then marginal product of Labor
should be equal to the price of an input, which is the price of. Like here. So this is what we
discussed. And now let's move to the next point issue in our analysis, which is above the national
commercial original oral of output, the value of output which was produced in our. Oh. Already
know what are those. Third. Maximizing problems and to demand. Particular. So sorry and so.
Always on this issue, how the markets for the respective production, the market for labor and the
market. You. Which was produced in our economy, or in other words. Probably. And as you
remember, the real wage which our firms pay to each worker is equal to. The marginal product. I
need. Space, space to an owner of this equal to the marginal. So if we know, think about the total.
Values total costs of those inputs. Total cost of Labor and total cost structure then? We would say
that the total real wages. Which are paid to our workers are equal to. And feel as you know. It is
the real wage which is played to a single word. So if we multiply. This. The real one. Why the
number of vertices of workers that employ in our, then we will get. In total cost of. So if MPL is for
example 10 euro. Today. Forever single person. We implore. Persons. This means that total OK,
total labor cost. It is just 10. So we have to pay 200. You. 2. Other employees, which means that
this. Number stands for the total labor cost. This is the total labor cost in our. And the same refers
to to capital, I mean the same logic refers to capital. So if we know that the rental price real rental
price of capital. And if you want to employ a given. Number of. Of column and even number of
machines, tools and so on. Then again if we wanted and we say that say then we will get the total
cost of capital, the total cost of employing for renting. Some pieces of. So if we. I mean this. Then
we don't. Coastal production, because this is the cost of Labor, this is the cost of that. In our firm,
in our portal, we use these two factors of production, labor and capital. So if we add them up. The
cost of Labor plus total cost of Labor plus total cost of column, then we get. Looks. So what now?
What's wrong is to? Total. End. Revenue from sales. Then. That remains. After we are owners or
managers or after we? The fact. This is called the economy. So. This is. That we produce. In our.
This is. OK, this is the value of course in terms of money, but in terms of. Goods all of any goods
we produce but our wedding. What is the birth of those things? So if we compare the value of all
we. The total cost of production. Sort of flavor and. Then the remaining amount. Assuming that
there is still. After these. Subtraction. That is. Number that you get at the end if you see economic
growth. So look what I'm trying to say is. Equally smooth that the value from that. Is equal to. Find
the 100. That you. In a given. Time to save. In the same way. Labor which is? So. Sequel to. Safety,
of course. And. OK. Let's assume that. This means that if we subtract this numbers. Including.
Then. The amount of money that we still have at our disposal we should call the economic. So in
our example that we have here. You see when. So. We see that. In this particular film. The process
of. Running this business is quite efficient because they are able to get some profit. The measure
bold that they produce and that sell in the market is bigger than total cost of production for. So it
is how many? Oh. Play. It was. To get. These word why? Because as you remember, we are
discussing that the movement. The distribute the issue of the distribution of national national. So
we have. And national income, or in other words, add value products. And we want to know how.
Our economy will distribute. The beginning, production and monk different. Economic agents
different. Businesses. Households, etcetera. Those economic agents that. Effect in our economy.
So therefore we slightly rearrange. This world. That. OK. So you will see that we just move. And
these two elements here the right hand side of the equation that. This one. This equation. Informs
about the same issue, but now we see that. Or in other words. Initially. It's just. Close. So this
amount of money goes to workers. So this amount of money goes to owners of capital to those
who. Decided to rent capital. And. The remaining part which is part. Says the insert, or in other
words, it goes to the owners of. So. You see this now looking at this phone. Answer. Question two.
Question two was about the distribution of. Production of the variable production, or in other
words of the national. The question was, how do we? Distribute the value production of the
national income in our field and now looking at these. And which is of course the simplification like
it is usually an economic problem, but anyway we can slide that. Of the income which was. Works
out in our records will produce. This is. Is. Distributed. Basic. Economic aid? What's the date
looking at this? Who receives? And then you of. Out to the production or national income which is
produced in our. Who are they those three groups of? If you look at this. We'll say that a portion
of. Income this was produced in our economy close to. Play to us asking if we are involved. If we
are employees, workers, then a portion of the national income goes to those who. And it's. They
were just kids. Education, knowledge, etcetera, to the process of production, so. This is our answer
if you look here. If move here, we would say that the next portion of the national income that
would produce. Go to school. Lands included in this sort of comment. So if we say governmental,
we need machines, tools, instruments, but also left. Bill Gates. So OK, the second box goes to. The
owners of the second factor of production, which is coming from. The remaining balance goes to
those who manage those firms and who owns also. Who owns those stories, I mean. Thirds of
business this issues. If managers are old, so there is no. Division I mean in usually in small firms
many owners are also managers. So in this case I would agree with you, that is, if we discuss this
spirit part, you would also say not just owners but that this party goes to managers. But this is
something I would say that this is not the case of difference corporations because in
corporations. Owners higher. Qualified persons managers who manage those cooperations. So
in this case managers are not programs, so they are just workers. Employees who are highly
qualified for simplifies with very high salaries. Remove narration. From anywhere in big
companies. Their managers. Usually they are not. So I would say that in a case of big firms and
managers would be just here, they are hired, they are just employees, highly qualified experts.
So here I would say it is. Safe to say it, if we think about economic profit, this is about. The
money that goes to owners of. Raised very high information. Just work. OK, so this is our answer
to the question to question #2. How do we devise the national income which was produced in
the world? Free channels. Those workers labor force the second part. The remaining part goes
through. Owners of the final. So having. Go to questions. What is? So now we. Focus on factors
which determine the demand for goods and services. Previously, as you remember, we were
discussing the tractors, which determined the demand for inputs for labor and for health. No.
Move to the demand for rules. What are the main determine? Of our and economic agents
demand for goods and services which are produced in our income. Those who studied. My great
economic strengths, I hope that. Most of you. Know that. Discussing. The demand side of the
column. Which is about the determinants of the aggregating. So you should know that we. Four
points. Hey, Cortana. Which is in equilibrium equal to GDP to the value of output. Are they those
components? One Sumption. In the most. Government spending and annex is net exports if our
economy is. Open then we also discussed that exports. It is the difference between exports and.
So now we will focus on these four elements. OK, probably free because for the time being we
will assume a simple case that. Here in the United next. So we're trying to discuss. This
elements. Both. So let's start with. Page. Consumption. Spending it is spending by who? Of
course by house, but by us if we buy. Food. Cars by foreign trees. Trees were dictation trees,
whatever. All of this is put into this category of assumption. The only exception exemption to
the rule is. When we buy, we houseboats, we post to learn when we buy new. Let's new
apartments, new houses. In this case, our purchases of new. Houses and they go to investment.
Like. He works in statistical agencies if they calculate. Consumption of investment and then they
put. The amount of money that we spent we households. The amounts of money that we spent
to buy. New houses, new floods on the primary market. This amount of money will learn to
investment to this segment. Included. There are many. Whatever you got. This will be. So step
by step. Discuss our consumptions funding. So we know that. We have schools. If we earn some
money, some income, mostly our income comes from our labor. But of course there are some
other sources of table. We may be overs of capital. A land. For athletes, for a building, that's a
third will grant from us. So we we can also be focused, but it's mostly our incomes come from
labor. We are. Employees in service. Economic entities. And then we Spanish this morning or
consumption? End. If we decide to. Our entire income means that the remaining part part will
go. For sale. So of course one more element of this is. Then we have to pay taxes, so therefore
we have to distinguish between our, let's say gross income and net income, or in other words
between any company if gross income and businesses. So if we're still mentally €100.30. So our
income. 100. Play Four Seasons on Fox. And for simplicity. There is one tax rate. So we have
here. And response rates went. It means that our list. Equal to. This is my grocery. 502 thirty
one. All day. But they have to play these stunts, which means that it would I still have. And my
disposal to to say and to consume and to say is equal to how many? What's the percentage is
the tax rate, but my most income is 500, which means that my medicine income or disposable
list. We have to play just one. Our disposable incomes 400 euro. Will be. Did Violet? What can I
do with? And. Saying. So we have to decide. How much of our after cuts, in other words?
Beautiful. How much? We use. Called. Such. Performance senior so. You would obtain St. If you
look at. And also gross. Minus classes this. This is this is for. So we see that our sentence. But
also all. Which is embassy? We call it marginal brothers because. And. Informs them on some.
Please. Post. Oh. When we. We won't say. It's always because. Which means that. An extra
dollar of income increases consumption. Box. Let's take this example. Use our own example.
Income. Here for simplicity. There is no open those considerations. Because. Please. Office. Let
me see. How are you? So let's assume. So. Just. Change. Says. NBC. Which is. Finish. And this
world. Which means that. Our increases by one extra dollar. And. Just more money. NBC is 50%.
So. These three. Please allow the money table. 80%. Each. You want of money goes. If design
person and we will back to. Absolute numbers. You're right. What does it mean? How many?
How much money I will devote for consumption so you see. Means that if I get more months
80% out of this extra money go for the remaining part. Each means that. It means that. My
income increases by one, so then the one changing incomes one here I should. Possible. And I
still have one more than I speak. $0.50. Oh. Is the next. that is my increase this rate. Then.
Saying. Insert. It's. You're transportation, for example. Jobs. The amount of the. About. Real
relationships. This demand. Which means that if. Investment that continuity increases and
advises. Because of the fact that people are done credits. Also investment credits are cheap. So
such cheap credits and spend this money to buy investing list. So during the 50s to economic
Providence. Increases. The rights of the interest. I went to happiness. Or what? It happens now,
you know, the section banks across the world. At least in those countries that increase. Interest
rates and this investment. Increase on higher than students are more expensive, which means
that the firms will think, well install expenses for us to buy machines and so on. Which means
that they will, of course. Higher rates will be, interests are. They are good for sales if we decide
to set up question of higher rates of interest is better for us because we take interest on our
savings. So let's take an example of Poland, OK. Before. For the right, I mean every option for
only four next last year. The main roads of interest involved were close to city. 0.5 something.
On saving accounts. Because what if we discuss? Those accounts, current accounts that we use.
And the right of interest offer exposed. Remind this. It was this. It was an interesting all of my
comments. Moses it was around zero point. No. One year later, because of the situation,
because of the highlight plantation and. Much, much higher at the moment being invented.
They offer for some limited amounts of money, even 80%. So if you now go to save money.
Seven years. But the problem is of course nominal rates are higher. As I said, one year ago they
were able to 0.5, now there are seven. No, but the problem is. Inflation rate of the bullet was
around. Which means that which situation is worse, better or is bad? From the new. The
previous. Nominal interest rate was 0.5. The inflation rate was three around, which means that
a real rate of interest was negative, but just minus two point. We were losing our money when
we. Decide which to keep it in balance. But this loss was not that high because it was minus
2.5% now. OK, if we look, it means it's now in real. A bank offers 717% of the purchasing power
of all month, so. But anyway, if we compare just nominal rate of course and nominal rate is
higher than it is. They can have more, so then profits will be high. OK, it's coming this
relationship between the interest rate and investment rates up. Investment, spending down,
and perseverance. So now let's let's information between an investment and. Here you have.
Which means. We know that for the reasons that we discussed that minute ago. For us. Interest
rates in real terms are. It's just. With our third. Why you listening? Look for the pair. Which
means that even dangerous strike is 5 like this one. But of course the Model 3 thirds these
spread into below the verse in the rain slow. Why would she? List. Government forces. As I said
that this is the first one was consumption is within one is very close to coming, which means
that it is the final one, would say government. If we. G. It is the amount of money that is our
move just. Government. Please spend. Services. Programs like this, for example. Highways
schools promise. For instruction, employees for teachers in public schools. And so on and so on.
Those. Who made? Say. Oh. And. And this. And this is for discussion. For the time being, I will
not. Trying to. It says. This is called police around the body. We will do this when we will discuss
business planning. The assumption will be also. That is. That's not changed. Spending. And. So
while we have insert government. Send. Some time ago. This level is valued for. So. But at the
moment, to change, or in other words, that she is in the government. And the same. Passes are
of course. Our government receives secularization. That's not change. All the time. So we have
just this three components of the Sumption investment that. And Please remember that. Pause.
Government spending and. You're ready to answer. The question was? What? Are the main
points of the demand. So. We can say that the demand for the services in our economy is
determined by our decisions, consumers, species to bond. Functions. Then people wouldn't
thirds to find. Fixed cost to buy the shoes at school, or in other words, it is determined by
investment, spending and finally investment spend money to buy. So demand for goods and
services. Reviews. In our economy depends on separate. How many books? Only universal
decisions how many goods firms are going to buy and govern. Decisions. So this is our answer to
question 3. What are the terminal? For. And what we have? This was the date. Form an opening
we will add to the the next element which is as we said previous, difference between the right
sports. Which? These. That. So the demand for moves. Is equal to the supply in insert general
definition of equity. If we discuss. We know that we mean if we save Midland, we mean the
aggregate demand for goods and services. Which? Is composed. Elements free from phones
record flows. Consist of. Remove programs on Sumption investment and. Total supply. It is just.
So if we. Discussed this question in the follow me. Then we have to think about factors. Reached
made this two degradate demand. Is it going out to the value that our? What are the factors
which state offers that output is equal to include? And answer questions. In other. As you said.
Because. And. If you want to continue, this will come back to the supply side. Reduction. Lost.
The supply of gold. Discussed in this first part of this presentation. Supply. On. This tool. And.
And just recall. Then. Of course we have. We keep we hold this assumption about the very
beginning that our economy produce. Which means that the output is fixed in the sense that we
cannot grow at the moment because we fully utilize our economic response. Therefore, we
cannot, so our output is at the potential level, or in other words, it is. We vote you. And most
extra amounts of Labor and capital and we found new technologies of production, we are not
able to increase funding. This assumption left but for the time being. Business. So finally. Signs
of this world. This is life, produce and the demand, which is everything demand. Which consist
of this free components, consumption, investment and government policies. Hello. Or supply. In
the point of. If we discuss the equilibrium. Applied. The value of. And the reason that our
Internet. We have stopped. This is fixed for the reason that I. We need to go out because we
cannot go beyond. The consumption. Indian home. Expensive man. That this could provide?
Received what's the value of incomes which are earned by the factors of production? This is
what we discussed during the first. In the course of there are three ways of measuring output,
or. If we conclude, we know that. Well, to the so. If you don't remember these, don't go. Come
back and study. Presented by this same letter. Production. Is presented. OK. He's also. Because
of his of the government doesn't change its physical properties. The same code still going with
watches there are fixed for this thing so. The only start with which is something. Because it's
not. Leave my own. We don't say that. The rate of interest in this sentence? Both. You know in
the long run which operates the row. For those look at this formula, this equation you see that?
Most. Of those who arrivals, as we have here. They are fixed. This year. So beautiful. This is a list
which is not determined. Being this question which is not fixed. Which is not determined by this
approach. It can hurt, therefore. insert what's the Because. OK. So before we go to the next
point. This way. The question was? You know, right? You know. Change. He's gonna close
institute. So please. He's. This is our answer to question #4. Did she? Equity. please story above.
We ask another strike. Next to the left. It works. Please. All this. Sometimes. you want to finals?
Move from the market? Financial funds. So. Equilibrium supply and demand for low rates.
Friends and worldwide. Test. Just. So we are doing this to discuss the role of these strike. Oh, so
he goes to distract. Transforms these show. Which? People. and? And you will see why. This is
an equivalent. Just. Minus. This week that. And we started. Stop. Previous solutional income
growth over the value of. And of the government has been. Minus the. Value of. Government so
difficult? Why? Minus. So listen. In other words, National Safety is saying. Just. After.
Consumption and government spending from the this is what we still have. That you should
have. Unbold So therefore. Clear the previous identity that. Please just please. And this was
opportunities. When we transformed this English, we transformed this. This. When you spend.
Hands. Which we started. Those. Sentence that. And we can split national interest. The saving of
the strikethrough of households. The first one was the private saving the second one. In the
moment. The only. can? Because as you can see. If it was something. Our disposable income
which was not consumed, this part goes. So you hear. So you mean? We see business. You know
the doors of thirst makes it. Just passed. Stop. I thought. So in this model. We just need us. And
it was interesting. which is just bad. What are you saying? Our income. More. Then. Now we
have this. What? Consumption. The value of. OK? You know which means that. OK. And.
Marginal propensity to consume by the average. The problem? OK, anyway. Maybe the last?
What? My disposable income will go for consumption. I assume that. If we assume that, that.
Anything you just mind? 6480 times 08. Which means that the private safe is. 100 - 7. 64. So this
is what? So what is not consumed? This. 75. What is? This is presented by Mr Access minus.
Government spent. Receives months mainly from practices. Someone. If we compare this to
values, then. 1? Please don't. Then we collect more money than respect, let's say faxes, and
then it leaves the public safety is equal to. 2100. Public safety is possible. Very. It is. You're
feeling good. Revenues from the boxes are lower than that. In other words, therefore we so if
we reverse the situation that government spending is higher taxes, but you have to spend 150
spends more than the collects in a unit, so it means that it has to look for some extra money.
Which means that. And. This is a very. Taking away.