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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.
On the day his son was born, a father decided to establish a fund for his son's college education. The father wants the son to be able to withdraw $4000 from the fund on his 18th b
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Q. Overall effect of a change in real wages? The supply of labor The supply of labour L S is assumed to be positively related to the real wage W/P
In order to observe the correlations between each variable, the most effective method to use is Vector Autoregression (VAR). VAR estimation uses a system of simultaneous equations
what is GDP
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