Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Now we will analyse how macroeconomic variables fit together and present models which explain the main macroeconomic variables.
Using these models we can, for instance, analyse what happens when government increases consumption, when central bank increases the target interest rate and when domestically produced goods do well in foreign markets. We can also understand significant observations of the economy like cyclical fluctuations in growth, correlation between unemployment and inflation and the relationship between interest rates and foreign exchange rates.
Macroeconomics isn't an exact science like physics. No one knows exactly how the macroeconomic variables are related. In its place, there exist some models which try to explain various observations and relationships between macroeconomic variables. Unfortunately, not all of these models consistent - one model may predict that unemployment would fall if the central bank lowers target interest rate whereas another may claim that such a change won't affect unemployment.
This type of problem is something you have to get used to and accept. Economics isn't a subject where you can perform an experiment to find out what is really 'true'. Observed phenomena may have different explanations in different models and different models will result in different predictions of macroeconomic variables. If you determine that 'An increase in x will lead to an increase in y' you really must not think of this as a property of the real world though rather as the property of a particular model.
One model which is very popular in virtually all basic courses in macroeconomics all over the world is the so-called neo-classical synthesis. As the name suggests, this is a combination or a synthesis of two models, namely classical model and Keynesian model. In brief, the neo-classical synthesis claims that Keynesian model is correct in the short term whereas the classical model is correct in the long run.
(Consumer Price Index)Given the following data, what was the value of the consumer price index in the base year? Calculate the annual rate of consumer price inflation in 2013 in ea
Illustrates about the terms of elasticity? • Definition of elasticity a. Price elasticity of demand b. Income elasticity of demand and c. Price elasticity of supply
How central banks increase the monetary base When the Central Bank cuts the target rate, they must simultaneously increase the monetary base by buying government securities. The
explain and illustrate how the Lm curve is derived.
You make a monthly deposit of $1,000 into a saving account for the next 10 years. How much can you withdraw immediately after your last deposit if your saving account pays 6% per y
...
what are the causes of inflationary gap
Was money a better store of value in the United States in the 1950s than it was in the 1970s? Why or why not? In which period would you have been willing to hold money? Which one w
Define the term- inflation Inflation between two points in time is defined as the percentage increase of price index between these two points in time.
Snake Farm Inc. (SFI) has been offered to submit a competitive bid for building 31 and 22, 18, and 11offshore pits per year for Athletic Inc. over the next four years. If the bid
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!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd