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.
assuming that B=0.33 Y1998=[0.33]Y1998 Estimate the permanent income for 1998
THE MODEL BUILDING A model of individual or aggregate economic phenomena represents a simplification of real world economic complexities. It may be expressed in words, ta
How can franchises ensure their products are appropriate for international markets?
Use the following data for a firm's output at various levels of employment (L) to calculate: a) its marginal physical product of labor (MPPL) schedule; (b) its (MPPL/MRCL) schedule
Suppose P(X1)=.75 and P(Y2/X1)=.40. What is the joint probability of X1 and Y2?
casual factors of traditional business cycle and its effects on the sectors of the economy
explain the profit maximizing/loss minimizing rule may be applied under the 3 scenarios
defination
Suppose arm's demand curve is given by P = 120? Find the (value of) price elasticity of demand (point elasticity) for the demand curve when the price is $100. Is demand elastic or
Explain the economy automatic stabiliser A budget deficit is shortfall between a government's tax revenue and its spending in a given year. If a government runs a budget defici
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