1 NATIONAL ECONOMY STRUCTURE 2 HOUSEHOLD AND ENTERPRISE 3 NATIONAL ECONOMIC BALANCE < BR> 4 BALANCE DISORDERS AND ECONOMIC POLICY Tables o Figures: o Patterns as a program package
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2 Finnish Economy 29
2.1 Components of domestic demand < /A>32 private consumption (32); capital formation (34); public consumption (36)
2.2 Domestic supply 40 production (40); productivity and productivity growth (43)
2.3 Foreign Trade 43 export (44); import (46); world economy (48)
2.4 National accounts 50
Summary 55
< A NAME="2 HOUSEHOLD AND BUSINESS"> 2 HOUSEHOLD AND BUSINESS
3 Consumer Behavior 61
3.1 Consumption and disposable income 61 income , consumption and saving (61); household consumption function (64); consumption and saving (68); consumption and family size (69)
3.2 Household equilibrium theory 69 budget line (69); Marginal utility theory (73)
Summary 77
4 Theory of the Firm 79
4.1 The goal of the firm 80 short and long term (80)
4.2 The cost and price of the firm 81 total costs (81); marginal costs (84); unit costs (84); marginal costs and firm supply (86)
4.3 Competition between firms 90 cost-benefit analysis (92); Competition in practice (94)
Summary 96
5 Theory of production99
5.1 Choice of production method 99 output demand and output demand (100)
5.2 The Law of Diminishing Marginal Product 101
5.3 Advantages of Large-Scale Production 103
Summary 106
6 Price Formation in the factor markets 107
6.1 Labor supply 107 wage differentials (107); how is the wage determined? (108); history of wage negotiations (109); arguments for the trade negotiations (110)
6.2 Capital and interest 111 marginal efficiency of investment (113)
6.3 Profit as a driver of development 115
Summary 117
3 NATIONAL ECONOMIC BALANCE
7 Parts, whole and balance 121 Structural basis for macro-analysis (122); balance of the overall economy (123); balancing of the national economy (125); full employment condition (126); purpose of macro analysis (126)
Summary 127
8 Private Consumption and Equilibrium 129
8.1 Theory of the consumption function 129 consumption function from cross-sectional data (129); consumption function from time series (130)
8.2 Consumption and Equilibrium 131 Comprehensive Econometric Model (133)
Summary 135
9 Capital Formation and Equilibrium 137
9.1 Saving and Investment Decisions 137 separation of saving and investment decisions (138); equality of saving and capital formation (139)
9.2 Investment Theories 141 autonomous capital formation (142); financing capital formation (142); derivative capital formation (143)
Summary 147
10 Employment, Wages and Prices149
10.1 Supply and Demand for Labor 149 production options in the national economy (150); labor supply (151)
10.2 Wages and the Phillips curve 152 Phillips curve (152); Phillips Curve Transformations (153)
10.3 Price Level Determination 154
Summary 156
11 Foreign Agriculture 157
11.1 Exchange rates and balance of payments 157 devaluation and revaluation (158); Floating currencies (158); currency basket (159); exchange rates (159); current account (160); balance of payments (162); foreign debt (163)
11.2 Why do we trade abroad 164 Production Possibilities Gap (164); Principle of Comparative Advantage (165); advantages of large-scale production and foreign trade (168)
11.3 Foreign trade and equilibrium 168 Determinants of imports and exports (168)
Summary171
12 Money 173
12.1 What is money? 173 money supply (173); motives of money demand (175); monetary tasks (176)
12.2 Monetary theory 177 velocity of money (177); quantity theory (178); Keynesian monetary theory (178)
12.3 Monetary theory and the Finnish economy 181 money supply restriction (183)
Summary 185
4 DISEQUILIBRIUMS AND ECONOMIC POLICY
13 Business cycle and growth 189
13.1 The nature of economic fluctuations 189 The nature of business cycles (192); The phases of the business cycle (193); The causes of business cycles (194); combined effect of multiplier and accelerator (195)
13.2 Economic growth196 standard of living and economic growth (196); capital stock accumulation (197); technical development (198); capital deepening (198); historical trends (199)
Summary 201
14 Economic policy 203
14.1 Main directions of economic policy 203 market mechanism or controlled economy? (203); economic policy objectives (204); economic policy effects (205); economic policy limitations (205)
14.2 Economic policy tools 207 trade policy (207); monetary policy (207); monetary policy instruments (208); fiscal policy (212); Income policy (213)
Summary 216
T2.1 Structure and development of the current account balance T2.2 Private consumption T2.3 Gross fixed capital formation T2.4 Financing of capital formation T2.5 State budget for 1997 T2.6 Production and employment T2.7 Productivity development, 1980 = 100 T2.8 Finnish exports by country T2.9 Exports by industry T2.10 Finnish imports by country T2.11 Imports by commodity group T2.12 The world's wealthiest countries T2.13 Finnish National Accounts T3.1 Income, Consumption and Saving T3.2 The Effect of Additional Income on Consumption T3.3 Total and Marginal Utility T4.1 Costs and Volume of Production T4.2 The most profitable production quantity for the company T4.3 Profit in imperfect competition T5.1 Labor input and production quantity T8.1 Consumption and national economic balance T9.1 The effect of consumption on capital formation T10.1 Main price indices T11.1 Some exchange rates T11.2 Dollar forward rate T11.3 Finland's balance of payments T11.4 Finland's external debt T11.5 Profit from foreign trade T12.1 Money supply
K1.1 Consumption sector and production sector K1.2 Economic cycle K1.3 Demand for strikes in the market K1.4 Supply of strikes in the market K1.5 Demand, supply and equilibrium price K1.6 Queue pricing and surplus pricing K2.1 Aggregate demand and aggregate supply K2.2 Finnish market market K3.1 Dependence of consumption on income K3.2 Household consumption function K3.3 Budget line and income effect K3.4 Budget line and price effect K3.5 Total benefit K3.6 Marginal benefit K4.1 Costs and quantity of output K4.2 Profit in perfect competition K4.3 Profit maximization K5.1 Diminishing marginal product K6.1 MEI function K8.1 Simple economic model K10.1 Production alternatives curve K12.1 Money supply and national income K13.1 Types of economic fluctuations K13.2 Gross national product and trends 14.1 Means and objectives of economic policy
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Asko Korpela, Lecturer in Economics, Helsinki School of Economics
Asko Korpela 970821 (960929) o Asko.Korpela@kolumbus.fi