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!
Q. Why GDP is determined only by aggregate demand?
Note that we haven't said anything about the aggregate supply so far. In order to justify why GDP is determined only by aggregate demand we have to explain why supply aggregate YS plays no role and why YS always would be exactly equal to YD (that is essential for the goods market to be in equilibrium).
We can explain why YS = Y* by analysing what would have happened if firms didn't supply this quantity.
1. Imagine that firms supplied and also produced a larger quantity so that Y > Y*.
2. From the figure above, YD< Y and firms can't sell everything they produce.
3. Unplanned stock investments will increase by Y - YD when companies are forced to put unsold products in stock.
4. Then firms will want to lower their supply. Reduction will continue until YS = Y*.
5. If, conversely they supply and produce too little, Y < Y* and then Yd> Y. Stocks will now be decreased and firms will want to increase the supply.
Please note that Keynesian model always presumes quantity adjustment to get back to equilibrium. There are no price adjustments in the Keynesian model.
Shortage, Surplus and Price Mechanism: A shortage is the situation in which the demand exceeds supply, which means producers are unable to meet the market demand for the produc
Determine on any market the effect of the following. Do each separately (on a separate graph) starting from an initial equilibrium position for each one. 1. increase in income
Private sector in the circular flow The private sector total income is known as the national income. Because private sector receives the entire return from the factors of pr
Recently, a bank was trying to decide what fee to charge for "expedited payments" - payments that the bank would transmit extra-speedily to enable customers to avoid late fees on c
If you were a restaurant owner and you knew that the demand for your restaurant was elastic, how would you feel about a sales tax on restaurant food? Explain.
This assignment lets you explore a quasi-experimental model using ANCOVA data analytical approach. By doing this data analysis project, you will understand a new quantitative resea
The system where workers concentrate on specialized tasks to make a product is referred to as: A. Coincedence of wants B. Roundabout production C.Freedom of enterprise
Consider the market for the trusty widget (the most common good in the world if economics textbooks are to be believed). Assume that the market is perfectly competitive. Suppose th
EXPLAIN ANY FIVE USES OF NATIONAL INCOME STATISTICS
I am working on a project for my class and this week discussion is on international trade and exports. what I am needing is the information for the 1970s
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: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd