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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.
Q. Interest rates and inflation? Assume you have 1 million on 1st January 2008. A basket of services and goods similar to the CPI basket costs 100,000. You can then purchase ex
P and Y are both endogenous variables and according to the quantity theory of money we need P.Y = constant. If we divide both sides by P we get Y = constant / P. Because Y = Y D i
Are there any current subsidy or welfare issues that are being discussed or addressed in parliament or in municipalities
A coil of inductance 0.04H and resistance 10Ω is linked to a 120V, d.c. supply. Determine (a) The ?nal value of current, (b) The time constant of the circuit, (c) The va
Question 1: Consider a two-period, two-person pure exchange economy. Utility functions and endowments are given as follows. u1(x0; x1) = (x0x1)2 and e1 = (18; 4) u2(x0; x1) = ln x0
1 ) GDP Consumption 240 244 250
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Crowding out is associated with: A. an increase in business investment resulting from an increase in government borrowing and higher interest rates. B. an increase in private savin
What are the Market interest rates The most important interest rates from a macroeconomic perspective are interest rates that the government pays on the loans they use to finan
what is GDP
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