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!
The problem with the Keynesian model
We can classify two problems with the Keynesian model as developed so far:
1. Π is exogenous. Although inflation may temporarily deviate from wage inflation, this deviation can't be too large and it can't last for too long (since real wages would become unreasonable low or unreasonable high). This model has no determination of Πw and hence no complete determination of Π. A model which predicts an inflation of around 6% by presuming a wage inflation of 6% isn't very useful. Keynesian model with inflation is hence incomplete.
2. It is quite unreasonable to presume that Πw would be independent of Y. More reasonable would be to model Π Was a positive function of Y. If we are in a boom, L would be above its average and unemployment below its average. In such a situation, it's reasonable to expect wage inflation to increase.
To solve these problems, we have to make Πw endogenous. We do this by Keynesian model adding the Phillips curve.
Properties of indifference curve: Property I: Higher indifference curve gives higher utility. Explanation: Since all goods are non-satiated, larger consumpti
The demand for money schedule shows that the quality of money that people want to hold
Describe elasticity? Differentiate demand elasticity and supply elasticity? What is arc elasticity? Please describe graphically with proper mathematical representation?
explanations to the short-run fluctuation and pilicy prescriptions of the schools macroeconomics thought
The more certain private property rights are, a. the less people need to invest in education or human capital development. b. The less entrepreneurship there will be. c. t
You should now find a press release from the Board of Governors of the Federal Reserve System, dated December 16, 2009, which discusses the decisions of the Federal Open Market Com
An engineer who was in the business of customizing software for small construction companies repay a loan that she got 3 years ago at 7% per year simple interest. If the amount she
Think of a business firm you recently visited (such as Walmart, Home Depot, Red Lobster, Barnes & Noble, McDonald's, etc.). What motivated the producers of all the individual produ
in the keynesian cross assume that the consumption function is given by c=200+0.75(y-t). given planned investment is 100, government purchases and taxes are both 100. then what i
Explain about the diminishing returns to an input. There are diminishing returns to an input while an increase within the quantity of which input, holding the levels of each of
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: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd