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Q. Is Consumption depend on GDP in the cross model?
Aggregate demand
The consumption function
Consumption C(Y) depends positively on GDP in the cross model
Remember that in classical model, consumption relies on the real interest rate. In cross model it relies on GDP. Note that it isn't possible to include r in the cross model as it is fixed. Though, we need to justify the dependence of C on Y.
The circular flow of income in an open economy An open economy is one in which international trade exists. Assume also that there is government spending and taxation. Thus
Suppose you have $10,000 and wish to purchase an annuity that pays you a fixed dollar amount every month. How much would you receive each month if the annuity rate is 1% and you in
Which economic system is the best solution to handling a crisis of epic proportion?
distinguish between state and dynamic multiplier and illusrate balanc budget theorm in hindi
what does international trade fails to its claims ?
iN BOTH CITIES, AN INCREASE IN INCOME COMBINED WITH EXPECTATIONS OF A STRONG MARKET SHIFTED DEMAND AND CAUSED PRICES TO RISE RAPLIDLY DURING THE MID-TO LATE 1980S. Illustrate with
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what is difference b/w dynamic and static multiplier
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Assume that the money demand function is (M/P) d = 2,200 - 200r, where r is the interest rate in percent. The money supply M is 2,000 and the price level P is2. If the price level
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