B. Total domestic private investment (i): The total expenditure of domestic enterprises to purchase goods in order to produce more goods and services in the future, including asset investment and inventory investment. For example, enterprises buy factories and new equipment.
C government procurement (g): the total expenditure of governments at all levels on goods and services is one of the components of the total domestic demand. For example, the government establishes courts to provide services such as national defense, diplomacy and public transportation.
D government transfer payment (TP): the money paid by the government to individuals is not used to buy products and services provided by individuals, but a simple income transfer, and the government transfer payment is not included in the government purchase. For example, the government's social security allowance for the elderly.
E export (x): refers to the expenditure of income flowing in from abroad for purchasing domestic products. For example, Americans buy our clothes.
2. Explain the total supply curve. Distinguish between the movement of points on the supply curve and the movement of the supply curve. What can increase production by moving points on the supply curve? What can increase production by moving the total supply curve?
Total supply curve: it reflects the combination of price level and output, that is, the total amount of products that manufacturers in the whole society are willing to supply at a certain price level, and it shows the relationship between total supply and general price level.
When other conditions remain unchanged, the change of total supply caused by the change of price level is manifested as the movement of points on the supply curve. Under the condition of constant price level, the total supply change caused by other conditions changes is shown as the movement of supply curve on the map.
Because the total supply is positively related to the total price level, the rise of the price level can increase the output by moving the points on the supply curve.
When the government implements policies to stimulate aggregate supply, that is, expansionary fiscal policy and monetary policy, it will shift the supply curve to the right, thus increasing output.
I don't understand.
4. There is market failure in the market. At this time, government intervention is needed, and the main means of government intervention are fiscal policy and monetary policy.
Through the analysis of IS-LM model:
In Keynesian economy, LM curve is a horizontal line, and expansionary fiscal policy makes the curve move to the right, which leads to an increase in income and a constant interest rate. Therefore, under the Keynesian economy, it is very effective for the government to implement fiscal policy. In vertical economy, that is, in classical economy, LM curve is a vertical line. At this time, the expansionary fiscal policy makes the is curve shift to the right, and the result is that the income remains unchanged and the interest rate rises. At this time, the government's fiscal policy is invalid.
5. There are short-term and long-term Phillips curves in western economics. The short-term Philip curve is a curve inclined to the lower right, and the long-term Philip curve is a vertical line. The monetarist school added expected factors to the Philip curve without changing the shape of the curve. In the short term, it is a curve inclined to the lower right; in the long term, it is a vertical line.