What are the macroeconomic variables, Macroeconomics

Assignment Help:

Macroeconomics usually deals with the behaviour of aggregates of economic variables. An economic variable is a magnitude whose value may changes. Important variables in macroeconomics are gross national product, national income, consumption expenditure, investment expenditure, total money supply, general price level and overall employment. Some of these variables are ‘stocks’ and some are ‘flows’. 

1. Stock and flow 

A stock variable is a quantity measures at a specific point of the time. For example, the money supply is a stock variable, a definite amount on a specific date.

It is a certain amount at a specified point of time. In stating stock variable, both the amount and time must be clearly specified. 

In contrast, a flow variable is a quantity which can only be measured in terms of specific period of time. In studying flow variables, it is important to be specific about the time period in question. For example, it is meaningless to say that Mr. X’s income is $. 9,000 since it is not clear whether his income is $. 9,000 per month or per year. An income of $. 9,000 per month is quite different from an income of $. 9,000 per year. All the flow variables are thus rates (of flow) over some specified time period. 

Thus, stock variables have a time reference with them, while flow variables have a time dimension. 

2. Ratio Variable

 

In macroeconomic analysis, we also use ‘ratio’ variables. The variables in this category express the relationship between two flows, two stocks, or of stock-flows at a certain point of time.

 

The ratio between saving and income (S/Y) or ratio between consumption and income (C/Y) described as average propensity to save and average propensity to consume respectively is the flow ratio variables.

 

 

Liquidity is a ratio between two stocks, viz., liquid assets and total assets. Some variables like income-velocity of circulation of money may be expressed as a ratio of the flow of money transitions to the stock of money.


Related Discussions:- What are the macroeconomic variables

What is keynesian model, Q. What is Keynesian model? Keynesian model is...

Q. What is Keynesian model? Keynesian model is slightly more complicated than the classic model and it is developed in four stages by analysing four separate models. Every mode

Macroeconomic policy issues facing the u.s. economy, While referring to the...

While referring to the "EYE on YOUR LIFE" section on, discuss the macroeconomic policy issues facing the U.S. economy today based on the economic concepts you have learned in this

Retirement planning, For retirement planning, you decided to deposit $1,000...

For retirement planning, you decided to deposit $1,000 per month and increase your deposit by $100 per month. How much will you have at the end of 10 years if the bank pays 3% annu

Consumer increases her purchases of compact disks, Suppose a consumer's inc...

Suppose a consumer's income increases from $30,000 to $36,000. As a result, the consumer increases her purchases of compact disks (CDs) from 25 CDs to 30 CDs. What is the consumer'

Analysis, provide data and analysis for the real GDP (as total and per capi...

provide data and analysis for the real GDP (as total and per capita) and its growth rate then draw a graph and identify the periods of the Malaysia’s business cycle 2007 -2011

What are economic growth and the growth rate, What are economic growth and ...

What are economic growth and the growth rate? Economic grow: It rise in a country is real level of national output like measured through Gross Domestic Product (GDP). Wh

Equilibrium quantity price and quantity, Over the past few years there has ...

Over the past few years there has been much concern about falling housing prices, and some policy makers have argued that the government should put a floor under prices so that the

Classical economic theory, Between 2007 and 2009 the U.S. economy experienc...

Between 2007 and 2009 the U.S. economy experienced a severe recession. In an effort to stimulate the economy, the federal government passed a stimulus package. Explain the federal

What is the malthusian theory on population, If population growth carry on ...

If population growth carry on then there will not be sufficient resources around for everyone this will lead to an event such as famine / war, which will decrease the population.

Sears rates its salespersons, Sears rates its salespersons according to the...

Sears rates its salespersons according to their sales ability and their potential for advancement. They sampled 500 salespeople with following data: Potential for Advancement Fair

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

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!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd