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macroeconomics (1 Viewer)
- Thread starter sandra
- Start date
fwoa.. theres so many limitations.. basically anything new classical that opposes simple model .
long-run effects are looked at sfa in the simple model, so you can go to the changes in long run. (such as an decrease in govt. tax revenue will lead to less govt. expenditure on imports, combined with the increase in iconsumer ncome will promote local commodity spending (supply-side economics), which in turn will hopfully give more tax revenue to the govt thru business, hence recovering a portion of the debt used to cover the original tax cut) - however obviously with a now competive local market, inflation can easily creep up.
i dont like full stops
ahaha sorry. but yer... correct me if im wrong, but im 99% sure that keynesial simple model highlights that when modelling the effects of GDP, they assume that Investment , Government Expenditure and Net Exports all remain baseline. ??!! I read that somewhere... that in itself is a major limitation.
long-run effects are looked at sfa in the simple model, so you can go to the changes in long run. (such as an decrease in govt. tax revenue will lead to less govt. expenditure on imports, combined with the increase in iconsumer ncome will promote local commodity spending (supply-side economics), which in turn will hopfully give more tax revenue to the govt thru business, hence recovering a portion of the debt used to cover the original tax cut) - however obviously with a now competive local market, inflation can easily creep up.
i dont like full stops
ahaha sorry. but yer... correct me if im wrong, but im 99% sure that keynesial simple model highlights that when modelling the effects of GDP, they assume that Investment , Government Expenditure and Net Exports all remain baseline. ??!! I read that somewhere... that in itself is a major limitation.