Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Aggregate demand and Say's Law
YD = YS in the classical model (Say's law)
Aggregate demand YD is defined as quantity of nationally produced finished services and goods that consumers, government and rest of the world want to buy under given conditions. One of the main elements of classical model is Say's Law. According to Say's Law aggregate demand is always equal to aggregate supply: YD = YS.
Say's Law is a number of times defined as 'supply creates its own demand'. Motivation for this statement is something like this. If production (YS) increases by one billion, national income would also increase by one billion. It means that individuals will have exactly one more billion for spending - just enough to buy increase in production. So YD will also increase by one billion. An increase in the supply of one billion has created an increased in demand by the same amount.
In the classical model, observed GDP Y would be equal to aggregate supply: Y = YS. GDP is concluded completely by the firms and there is no need to model aggregate demand. It's always the case that YD = Y = YS = f (L, K).
Why did housing prices rise rapidly during 2002-2005? Why did the mortgage default rate increase so sharply during 2006 and 2007 even before the 2008-2009 recession began?
Is the natural rate of unemployment fixed? Why or why not? How are full employment and the natural rate of unemployment related? Is the actual rate of unemployment currently greate
Suppose that a household in a two-period model has income of $30,000 in period 1 and $25,000 in period 2, and the interest rate is 75 percent. Assume that the price of the good is
How could utility theory help us understand the difference between a federal income tax and a federal sales tax on consumer consumption patterns?
definition and charactoristics of index numbers.problems while constructing index numbers
Using an aggregate demand and supply diagram, explain how each of the following scenarios affects the equilibrium price level and aggregate output. Consider first the short-run, th
Sims (1980) introduced an exciting and ground-breaking new framework which would prove to be extremely insightful for macroeconomic analysis. This is known as vector autoregression
Q. When Ochratoxin molds can occur? Ochratoxin A is a phenylalanyl derivative of a substituted isocoumarin produced by Penicillium verrucosum in temperate climate and by severa
U.S. employers have strongly opposed a corporatist agenda, under which employment relationships would be jointly governed by unions, employers, and government. This orientation has
Find the Equilibrium Quantity In a small town only two candy shops operate and they compete with each other in quantity. Consumers do not differentiate between candies sold by
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd