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Q. Describe classical model of macroeconomics? Though we use the term ‘the classical model' as if there were just one classical model, this isn't quite true. For all the models
Q. Explain about Labor Market in AS-AD model? In AS-AD model, economy will always be on the response curve - the thick line in chart below. Figure: The labor in the
AD-curve, just like before, displays combinations of Y and P where both goods market and money market are in equilibrium. At any given instance, even when we have inflation, aggreg
how can a country maintain equilibrium GDP with foreign trade?
The AD curve is the aggregate demand The AD curve is the aggregate demand as a function of P whenthe goods and money market are both in equilibrium
factors in economic growth
Describe how price level evolves over time Using the time series we can study how price level evolves over time. If all prices rose by 2% during one month, price level would ri
In the keynesian cross model, assume the consuption function is given by C=200=.75(Y-T) and planned investment=100, government purchases and taxes are each of them 100. a) Draw a g
The number of gallons of paint that Home Depot sells in a given day is normally distributed with a mean of 150 gallons and a standard deviation of 35 gallons (I realize that the di
The AS-AD model with inflation When we remove assumption of constant prices to allow varying real wages. Resulting model was known as AS-AD model. Similarly we now remove the a
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