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Q. Describe the macroeconomic variables?
In this section we have summarizes all the macroeconomic variables. The first column denotes the symbol we use for variable whereas column 2 shows the name of variable.
Variable
Variable name
Y
Real GDP
P
Price level
P.Y
Nominal GDP
U
Unemployment
L
Hours worked
K
Amount of capital
W
Nominal wage
W/P
Real wage
M
Money supply (nominal)
R
Nominal interest rate
r
Real interest rate
C
Private consumption (real)
I
Investments (real)
G
Government expenditure (real)
NT
Net tax (real)
X
Exports (real)
Im
Imports (real)
NX
Net exports (real)
SH
Household savings (real)
SG
Government savings (real)
SR
Rest of the world savings (real)
p
Inflation
pe
expected inflation
pw
Wage inflation
pM
Growth in money supply
E
Exchange rate
pE
Depreciation in exchange rate
Two of the variables are stock variables: K and M. Prices can't be characterized as a stock or flow variable. P, W, R, r and E apply at a given point in time whereas p, pe, pw and pE apply over a period of time. p, pw and pE are changes in P, W and E during previous time period while pe is the expected change in P during next time period. All the other variables are flow variables measured in some unit per unit of time (for instance, L is the number of hours worked per year or per any other unit of time).
Examine two (2) tenets of the mercantilist school. Determine whether you agree or disagree with these principles. Provide at least two (2) reasons to support your answer
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