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A farmer grows wheat and sells it to a miller for $1; the miller turns the wheat into flour and sells it to a baker for $3; the baker uses the flour to make bread and sells the bre
Macroeconomics usually deals with the behaviour of aggregates of economic variables. An economic variable is a magnitude whose value may changes. Important variables in macroeconom
P and Y are both endogenous variables and according to the quantity theory of money we need P.Y = constant. If we divide both sides by P we get Y = constant / P. Because Y = Y D i
Aggregate demand and Say's Law Y D = Y S in the classical model (Say's law) Aggregate demand Y D is defined as quantity of nationally produced
The city of Johnstown decides to build a new stadium to attract a basketball team from the city of Rosendale. One economic advisor suggests that the stadium should be fi
Ok... So if the price level is rising, this means that inflation is rising as well, so the value of the dollar in the US would decrease meaning that purchasing power decreases as
In a large open economy, if the economy has a fiscal expansion, what would happen in the solow model?
Since their inception, VAR models have been at the centre of many controversies associated with econometric modelling. The recurring criticism throughout history is due to the mode
If a country allows trade and, for a certain good, the domestic price without trade is lower than the world price. A) the country will be an exporter of the good. B) the country
how can a country maintain equilibrium GDP with foreign trade?
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