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.

Posted Date: 8/14/2013 2:41:11 AM | Location : United States

Ask an Expert

Related Discussions:- Is consumption depend on GDP in the cross model, Assignment Help, Ask Question on Is consumption depend on GDP in the cross model, Get Answer, Expert's Help, Is consumption depend on GDP in the cross model Discussions

Write discussion on Is consumption depend on GDP in the cross model
Your posts are moderated

Write your message here..

Related Questions

Relate overnight rate with money supply, Relate overnight rate with money s... Relate overnight rate with money supply When the overnight interest rate decreases, the money supply increases When the overnight interest rate increases, the money supply d

Calculate the npv for discount rates, Shambles, a large toy retailer, are l... Shambles, a large toy retailer, are looking at bringing out a new range of soft toys. The range under consideration is "Mythical Beasts."  The "Mythical Beasts" range will cost £50

Quality of health care, Explain how changes in the quality of health care w... Explain how changes in the quality of health care will influence the demand for care.

Conclude a hypothesis test, Will improving customer service result in highe... Will improving customer service result in higher stock prices for the companies providing the better service? When a companys satisfaction score has improved over the prior years r

Demand, Demand: Demand is quantity of a good buyer who wishes to purcha... Demand: Demand is quantity of a good buyer who wishes to purchase at each conceivable price. The law of demand explains us that if the price of certain commodity increases,

Theory of aggregate deman, unplanned changes in inventory are counted as in... unplanned changes in inventory are counted as inventory spending by firms.say true or false and justify

What would be due process require in circumstances, The Russ College of Eng... The Russ College of Engineering and Technology of Ohio University announced in a press conference that it had found "rampant and flagrant plagiarism" in the theses of mechanical en

Quiz, To overcome the stagnant growth it was experiencing for the past 10-1... To overcome the stagnant growth it was experiencing for the past 10-15 years, Japan undertook which of the following measures? Answer Undertook programs to build infrastructure

Peace time goods and war time goods, Draw the PPC model of peace time goods... Draw the PPC model of peace time goods and war time goods and describe its characteristics. Label point A as being more toward peace time goods than war time goods and show graphic

Controlling the supply of money, When the reserve requirement changes, whic... When the reserve requirement changes, which of the following will change in the total banking system?  (Answer change or No Change) Transaction Deposits Total Reserves Req