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A macroeconomic model is an analytical tool designed to describe the operation of the problems of economy of a country or a region. These models are usually designed to examine the comparative statics and dynamics of aggregate quantities such as the total amount of goods and services produced, total income earned, the level of employment of productive resources, and the level of prices.
This is the formula that was used for the old Financial Times stock market index (the predecessor of the FTSE 100 Index). It was inadequate for that purpose. It was inadequate for that purpose. In particular, if the price of any of the constituents were to fall to zero, the whole index would fall to zero.
In Keynesian economics, the transfer payments multiplier (or transfer payment multiplier) is the multiplier by which aggregate demand will increase when there is an increase in transfer payments (e.g., welfare spending, unemployment payments). [1]
According to this formula the incremental capital output ratio can be computed by dividing the investment share in GDP by the rate of growth of GDP. As an example, if the level of investment (as a share of GDP) in a developing country had been (approximately) 20% over a particular period, and if the growth rate of GDP had been (approximately) 5 ...
In some economics textbooks, the supply-demand equilibrium in the markets for money and reserves is represented by a simple so-called money multiplier relationship between the monetary base of the central bank and the resulting money supply including commercial bank deposits. This is a short-hand simplification which disregards several other ...
The Lucas islands model is an economic model of the link between money supply and price and output changes in a simplified economy using rational expectations.It delivered a new classical explanation of the Phillips curve relationship between unemployment and inflation.
Country foreign exchange reserves minus external debt. In international economics, the balance of payments (also known as balance of international payments and abbreviated BOP or BoP) of a country is the difference between all money flowing into the country in a particular period of time (e.g., a quarter or a year) and the outflow of money to the rest of the world.
(To be precise, the usual Keynesian multiplier formulas measure how much the IS curve shifts left or right in response to an exogenous change in spending.) American Economist Paul Samuelson credited Alvin Hansen for the inspiration behind his seminal 1939 contribution. The original Samuelson multiplier-accelerator model (or, as he belatedly ...