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Importance of macroeconomics models Using the models we can, for example, analyze what happens when the government increases consumption, when the central bank increases the tar
Expenditures and the Effects of Fiscal Policy are stated as follows: Having finished the discussion on the tax policy and taxation, now let’s us focus on expenditures and the e
Do we get paid nominal or real wage?
In real life, the operation of simple multiplier is affected by many leakages. Leakages in the multiplier arise out of the following reasons: (1) Saving: If all the income is sp
What are the Changes in the exchange rate Assume that United States is our home country and that current euro exchange rate in direct notation is SD= 1.5 (euro/USD). In indirec
Consider the following macroeconomic model: Y = C + I + G + NX C = 100 + 0.8 YD I = 300 - 1000 i NX = 195 - 0.1 Y - 100 (E.R.) E.R. = 0.75 + 5 i M = ( 0.8
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
Why might external economies of scale be of interest to developing countries?
Explain the purposes economists disagree and using models of economics. Using Models of Economics: a. Positive economics b. Normative economics A forecast is an easy p
If the price level depends on both the current money supply and future expected money supplies, in order to stop a hyperinflation, a central bank may try to establish credibility b
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