lecture_recording_on_10_March_2025_at_10.29.33_AM

What is the potential impact of cutting Columbia University's funding by $400 million?

It may lead to a decrease in prestige, attract fewer students, and reduce their ability to fund research.

How does the funding at Columbia University relate to macroeconomics?

The funding affects labor, capital, and research, which in turn influences productivity and overall economic output.

In terms of research funding, what potential advancements could a well-funded university contribute to?

Advancements could include medical breakthroughs, such as cancer cures, or new technological developments that boost productivity.

What is a concern regarding government spending when calculating GDP?

Removing government spending from GDP calculations may misrepresent the actual output and economic health.

What does a government's budget deficit do to the market for loanable funds?

It reduces the supply of funds available for private borrowers, potentially increasing interest rates.

What is 'crowding out' in economic terms?

Crowding out refers to the phenomenon where increased government borrowing leads to higher interest rates that make it more costly for the private sector to borrow.

What was the effect of the Tax Cuts and Jobs Act of 2017 on corporate investment?

It provided tax incentives allowing companies to write off capital investments more quickly, which encouraged more investment.

How does an increase in interest rates affect consumer borrowing?

Higher interest rates make borrowing more expensive, decreasing the quantity of loans demanded.

What is the fundamental relationship between savings, investment, and GDP per capita?

Increased savings lead to increased investment, which increases the capital stock and ultimately GDP per capita.

How do interest rates generally react in markets with a surplus of loanable funds?

The interest rates tend to decrease as banks lower rates to attract borrowers.