Econ 2hh3 certification - Study guides, Class notes & Summaries

If consumers use their house as collateral for lending and the value of housing in general falls, then lending and aggregate consumption decrease. We assume that the representative consumer's preferences exhibit the properties that current and future consumption are both normal goods and that the consumer likes diversity in his or her consumption bundle. An increase in total factor productivity shifts the production function upwards and increases the marginal product of labour. A com...

If consumers use their house as collateral for lending and the value of housing in general falls, then lending and aggregate consumption decrease. We assume that the representative consumer's preferences exhibit the properties that current and future consumption are both normal goods and that the consumer likes diversity in his or her consumption bundle. An increase in total factor productivity shifts the production function upwards and increases the marginal product of labour. A com...