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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
q characteristics of endogenous growth theorythere are many different explanations for technological progress most of them though have many common
q describe endogenous growth theoryendogenous growth theory or new growth theory was developed in the 1980s by paul romer and others in neo-classical
q illustrate neo-classical growth modelthe main purpose of another significant growth model neo-classical growth model is to explain how it is
q show the destruction of capitaldestruction of capital for instance through a war works in the opposite way marginal product of labor falls gdp per
q explain the classical growth theoryproduction function wont provide us with a theory or explanation of growth its only a convenient tool that helps
q production function and growthfrom the simple production function y fl k we can classify three sources of growth an increase in l an increase
the aggregate production functiondefinitionimagine the national economy during a short period of time say one week we refer l total amount of