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q explain reversed says lawin the cross model supply should instead follow demand cross model not only rejects says law it turns it entirely upside
q illustrate the says lawwith says law aggregate demand would always be equal to aggregate supply and cross model would be incorrect keyness
q why gdp is determined only by aggregate demandnote that we havent said anything about the aggregate supply so far in order to justify why gdp is
q is household savings depend on gdp in the cross modelhousehold savings depends on y since sh y - c - nt and c and nt both rely on y how it depends
the government in the cross modelnet taxes nty depends positively on real gdp in the cross modelin this model when national income increases amount
the rest of the world in the cross modelimports imy depends positively on y in the cross modelin the classical model imports doesnt depend on y the
q describe the keynes motivationkeynes motivation in good times when y is high above its trend national income is high above it trend consumers will
at first it may seem obvious that consumption will rely on y if gdp is doubled in real terms over a number of years government consumption private
q is consumption depend on gdp in the cross modelaggregate demandthe consumption function consumption cy depends positively on gdp in the cross
q show the analysis of cross modelwe can divide our analysis of cross model into three sections aggregate demand aggregate demand is a major
summary of the cross modelthe below list summarizes the cross model and associates it to classical model labor market real wages wp is exogenous
q what is keynesian modelkeynesian model is slightly more complicated than the classic model and it is developed in four stages by analysing four
q describe keynesian cross modelkeynesian cross model is a simple version of what we call the complete keynesian model or simply the keynesian model
q important points about the classic modelthe most important points about the classic model are as following monetary and fiscal policy cant
q how to evaluate total savingstotal savings total savings sr depends positively on the real interest rateremember that total savings is stated as
q explain about household savingsremember that consumption may refer to observed consumption as well as to demand for consumption the same is true
government revenue government spending and net exports g nt and nx are exogenous variables in the classical modelin the classical model and in
q what is investment demandinvestment demand investment ir is assumed to be negatively related to the real interest rate rtotal demand for
q describe about consumption functionthe consumption functionconsumption cr is assumed to be negatively related to the real interest rate
q determine price level from the quantity theory of moneythe price levelthe price level is determined from the quantity theory of money p
q explain about quantity theory of moneyone of the main elements of the classical model is quantity theory of money quantity theory of money connects
at first says law may seem obvious though its not - actually its highly controversial the reason it may seem obvious is that you have perhaps learned
aggregate demand and says law yd ys in the classical model says lawaggregate demand yd is defined as quantity of nationally produced finished
q overall effect of a change in real wagesthe supply of laborthe supply of labour ls is assumed to be positively related to the real wage wptotal
q describe the classical model of macroeconomicsthe classical model was a term coined by keynes in the 1930s to signify essentially all the ideas of