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!
Q. Why GDP is determined only by aggregate demand?
Note that we haven't said anything about the aggregate supply so far. In order to justify why GDP is determined only by aggregate demand we have to explain why supply aggregate YS plays no role and why YS always would be exactly equal to YD (that is essential for the goods market to be in equilibrium).
We can explain why YS = Y* by analysing what would have happened if firms didn't supply this quantity.
1. Imagine that firms supplied and also produced a larger quantity so that Y > Y*.
2. From the figure above, YD< Y and firms can't sell everything they produce.
3. Unplanned stock investments will increase by Y - YD when companies are forced to put unsold products in stock.
4. Then firms will want to lower their supply. Reduction will continue until YS = Y*.
5. If, conversely they supply and produce too little, Y < Y* and then Yd> Y. Stocks will now be decreased and firms will want to increase the supply.
Please note that Keynesian model always presumes quantity adjustment to get back to equilibrium. There are no price adjustments in the Keynesian model.
To develop what you believe is a terrific idea for a video game, you lease 50,000 square feet in an office building from Commercial Property, LLC, under a written five-year lease.
The exante real interest rate is based on _____ inflation, while the ex post real interest rate is based on _____ inflation. A) expected; actual B) core; actual C) actual;
The city of Johnstown decides to build a new stadium to attract a basketball team from the city of Rosendale. One economic advisor suggests that the stadium should be fi
Limitations of the theory of rational expectations: Critics of this theory note that if policy makers have more information about the economy or their own actions than d
what does phillip curve signify? how do you reconcile the difference in the shap of the curve in the short run and the long run?
Q. Demand for money for AS-AD model? The money market The demand for money depends negatively on R,positively on Y and positively on P in AS-AD model
n 2013, approximately 58 percent of the adult population (245 million) was employed, the lowest employment rate in 20 years. If the employment rate increased to the prerecession l
Explain the trade-off between equity and efficiency. Identify how individuals and organizations are likely to change their behavior as a result of government actions.
process to calculate gross domestic product We just include finished goods and services - which is, anything that is sold directly to consumer. Electric power sold to a steel m
What is Consumer Price Index CPI is a price index of a specific basket known as the CPI-basket. CPI-basket contains essentially all the service and goods consumed in a country
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: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd