Macro 5.4 & 5.5 Deficits, Debt, and Crowding Out

[@SweetbJames]

As a fellow teacher, all I can is you rock man! A model of clarity and thoroughness.

[@ReviewEcon]

Thank you James! Good luck to your students on this year's exam!

[@kingmanki7161]

@@ReviewEconcan you help me with theory of value

[@ReviewEcon]

Old school economic theory essentially said that value comes from the amount labor (or other resources) required to produce a good or service. Modern economic theory says that value is a function of marginal benefit (or marginal utility) a consumer gains by purchasing a product. It is usually measured by a person's willingness to pay for a product. If you would pay $5 (at most) for a candy bar, that candy bar has $5 of value to you. That is it gives you $5 worth of marginal benefit (or marginal utility). I cover some of these concepts (more micro than macro) in this video: kzbin.info/www/bejne/i4OUZHudnpqgjK8si=eTk1fz4cCS6N8Hb2

[@walusunguvital6869]

this was very helpful most pple do not explain types of shifts

[@ReviewEcon]

I'm glad it helped! Good luck with your studies!

[@pooh4736]

I love your videos! But I have a question, Why is the answer A when it should be about fiscal policy as said in the video?: Which of the following occurs as investment becomes more responsive to changes in the interest rate? (A) Monetary policy becomes more effective at changing real gross domestic product. (B)Fiscal policy becomes more effective at changing real gross domestic product. (C)Monetary policy becomes more effective at changing interest rates. (D) Fiscal policy becomes more effective at changing interest rates. (E)There is no change in the effectiveness of either monetary or fiscal policy.

[@ReviewEcon]

That question is about both monetary and fiscal policy. Interest rate sensitivity increases the effectiveness of monetary policy, but decreases the effectiveness of fiscal policy. Here is the video about monetary policy. kzbin.info/www/bejne/r4C8aHiVftGKfdE Good luck on Friday!

[@pooh4736]

@@ReviewEcon Thank you so much! You are my life saviour, just did micro and forgot everything about macro🥲

[@pooh4736]

@@ReviewEcon Thank you so much! You are my life saviour, I just finished micro and forgot everything about macro🥲