Explain the difference between the following two expressions: Y = C(Yd) + I + G + CA(EP /P, Yd) and Y = C + I +G + CA
What will be an ideal response?
The first one represents a behavioral equation and thus may express equilibrium condition for the output market or the aggregate desired demand for output. The second equation is only an identity that is always true.
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Briefly define real and potential GDP, and explain the relationship between real GDP and potential GDP. How can we measure potential GDP?
What will be an ideal response?
Assume the U.S. government wants to hold the value of the dollar at $1.00 U.S. equals 10 Chinese yuan, but it finds that the value of yuan is depreciating against the U.S. dollar. What would be an appropriate policy to reverse this trend?
A) Increase government spending within the U.S. B) Buy U.S. dollars. C) Sell U.S. dollars. D) Increase the money supply in the U.S.
Real business cycle theorists
a. accept the notion that the economy's movement through time is basically unstable and cyclical b. believe that the economy is influenced by real events, such as wars and population growth and not by psychological events, such as changes in consumer confidenceand that these real events trigger cycles c. argue that the economy, except for brief periods of instability, is highly static and this is because markets are noncompetitive d. argue that the economy cannot achieve full employment, even in the short run e. believe that the economy is dynamic and competitive and not subject to cycles
Indians and Indian-Americans have played a pivotal role in powering Silicon Valley's digital revolution. The emigration of talented people from countries like India to countries like the United States is often called:
A. credentialism. B. the brain drain. C. Malthusianism. D. outsourcing.