Government revenue, Macroeconomics

Assignment Help:

Government revenue, government spending and net exports 

G, NT and NX are exogenous variables in the classical model

In the classical model (and in most macroeconomic models) government spending and net taxes are presumed to be exogenous variables determined by the government.  

Net Exports NX is also an exogenous variable that means both imports Im and exports X are exogenous variables. Exports are determined by rest of the world and this variable is exogenous in most macro models. It's possible to presume that imports depend on real interest rate by the same arguments we used for consumption. It would be possible to modify classical model such that imports depended on real interest rate though results would be largely the same. Consequently we presume that imports are exogenous as well.


Related Discussions:- Government revenue

What is gdp, Assuming an economy with no government and no foreign trade. M...

Assuming an economy with no government and no foreign trade. Measure GDP for the following output scenario: There are three firms: firm A is a minning company, firm B is a stee

Derivation of indifference curve, Derivation of Indifference Curve: Co...

Derivation of Indifference Curve: Consider any commodity bundle denoted by point A in the above figure which consist x 0 1  and x 0 2 amount of good I and good II respectiv

Determined that the firm''s cost function, Robert's New Way Vacuum Cleaner ...

Robert's New Way Vacuum Cleaner Company is a newly started small business that produces vacuum cleaners and belongs to a monopolistically competitive market. Its demand curve for t

Every month price of the telecommunication services, You are an assistant t...

You are an assistant to a senator who chairs an ad hoc committee on reforming taxes on telecommunication services. Based on your research, AT&T has spent over $15 million on relate

The crowding out effect, what goals and policies are being discused to addr...

what goals and policies are being discused to address the crowding out effect?

Composition and direction of trade, Composition and Direction of Trade: ...

Composition and Direction of Trade: The impact of trade reforms can be observed from the changing structure of India's  foreign  trade in  terms of diversity  of  production

International trade, difference between mercantilism and absolute advantage...

difference between mercantilism and absolute advantage

Explain the classical growth theory, Q. Explain the classical growth theory...

Q. Explain the classical growth theory? Production function won't provide us with a theory or explanation of growth. It's only a convenient tool that helps us breaking down gro

National income, briefly explain any five uses of national income statistic...

briefly explain any five uses of national income statistics

Explain the money market diagram, Q. Explain the Money market diagram? ...

Q. Explain the Money market diagram? Let's begin by studying the money market when GDP is given. When Y is given, MD will only rely (negatively) on R and we can draw a figure w

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