Describe keynesian cross model, Macroeconomics

Assignment Help:

Q. Describe Keynesian cross model?

Keynesian cross model is a simple version of what we call the 'complete Keynesian model' or simply the Keynesian model. Keynesian model has as its origin the writings of John Maynard Keynes in the 1930s, specifically the book 'The general theory of Employment, Interest, and Money'. Though this book was written as a criticism of the classical model, similarities between Keynesian model and classical model are definitely greater than the differences. Let's point out the three most significant differences directly: 

  • Say's Law doesn't apply in the Keynesian model.
  • the quantity theory of money doesn't apply in the Keynesian model.
  • the nominal wage level W is an exogenous variable in Keynesian model.

Remember that W being exogenous means that it's pre-determined outside the model. It doesn't necessarily mean that it's constant over time - even though this is a common assumption. Though the nominal wage should be known at any point in time in this model. To simplify our description of Keynesian model, we will begin by presuming that W is constant.


Related Discussions:- Describe keynesian cross model

Circular flow model and the supply and demand curves, Write a one paragraph...

Write a one paragraph summary and three paragraphs that take the information in the article and relate it specifically to the circular flow model and the supply and demand curves.

Define public good, A public good: A) Generally results in substantial n...

A public good: A) Generally results in substantial negative externalities. B) Can never be provided by a nongovernmental organization. C) Costs essentially nothing to prod

Monetization of public debt, What are the pros and cons of monetization of ...

What are the pros and cons of monetization of public debt

News involving a legal issue, Your Assignment is to find a news article inv...

Your Assignment is to find a news article involving a legal issue that interests you and report on it in the Discussion Board. Please provide a link to the article so that others c

Answer for this only assignment question in (3000 words), Question 3 (44 ma...

Question 3 (44 marks) Please note that this question requires substantial research. A summary from the text book is not sufficient. To score well you will have to consult several a

What is privatization?, Privatization is the move of ownership from the pub...

Privatization is the move of ownership from the public sector (government) to the private sector (business).

What is real gross domestic product, What is Real GDP To be able to ma...

What is Real GDP To be able to make reasonable comparisons of GDP over time, we must adjust for inflation. For instance, if prices are doubled over 1 year then GDP would doubl

Recommendation reduces cost, In "Kitchen Nightmares", Chef Gordon Ramsa vis...

In "Kitchen Nightmares", Chef Gordon Ramsa visits struggling restaurants and gives the owners of the restaurant a number of recommendations intended to reverse the restaurant's pro

Describe type of protection, A new industry develops, and our government wa...

A new industry develops, and our government wants to protect it from foreign competition. Which one of the following arguments would appropriately describe this type of protection?

Effect of that on the tofu market, New technology was just invented that de...

New technology was just invented that decreases the cost of planting and harvesting soybeans: show the effect of this on the soybean market. Show the effect of that on the tofu mar

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