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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.
What is the difference between money multiplier and credit multiplier
DEFINE IS CURVES AND DRIEVE IT
Explain why a perfectly competitive firm does not expand its sales without limit if its horizontal demand curve indicates that it can sell as much as desires at the current market
why does the price level not enter desire consumption, investment and net exports of the desired aggregate expenditure function in the keynesian cross model
What is crowding out?
Supply of labor, L S (W/P), depends positively on real wages in classical model. It isn't always clear which individuals are included in the labor supply. Labor supply may consist
Businesses often decide between using automation and labor in production. An automotive environment may have high fixed costs and low variable costs, and an industry that utilizes
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1. Christopher has $200,000 to invest, and he is considering the following business opportunity. He would use his $200,000 to buy a mechanical self-service car wash. He'll earn $40
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