Tài liệu The determination of national income

Aggregate output in the short run
Potential output
–the output the economy would produce if all factors of production were fully employed
Actual output
–what is actually produced in a period
–which may diverge from the potential level

Some simplifying assumptions
Prices and wages are fixed
The actual quantity of total output is demand-determined
–this will be a “Keynesian” model
For now, also assume:
–no government
–no foreign trade
Later chapters relax these assumptions