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What is the relationship between net exports and GDP?

The relationship between ne exposts and GDP makes the slope of the ae curve flatter than it would be otherwise


In the keynesian model of aggregate expenditure real GDP is determined by what?

The aggregate expenditure model relates aggregate expenditures, which is the sum of planned level of consumption + investment + government purchases + net exports at a given price level, to the level of GDP. The key word here is planned. GDP is the same as aggregate expenditures(AE) except for one difference. People, firms and governments don't always spend what they had planned. So AE differs from GDP in that it deals exclusively with amounts firms intend to invest, and not necessarily taking into account amounts that will actually be invested as in GDP Where GDP is defined as C + I + G + NX and I = Ip + Iu (planned + unplanned investment), Aggregate Expenditures is defined as C + Ip + G + NX. AE (Aggregate Expenditure) is used in conjunction with GDP in the Aggregate Expenditures Model to predict future GDP direction. In this model, when AE = GDP then the economy is in equilibrium. According to this model an economy will move towards its equilibrium causing changes in the GDP.


Derive aggregate demand curve from aggregate expenditure model?

an increase in price level would lead to a fall in AE, vice versa. So by plotting those points out, you can derive an AD curve


Why are gas prices on the rise again?

Gas prices are on the rise for a multiple of reasons as follows The current president signed an order placing much of the oil rich areas in America and Off Shore unavailable for drilling or exploration. This ban on drilling here in USA land or ocean areas threw the USA into the situation to buy most of our oil glogally. Since the USA was forced back into competeing on world oil markets the price for crude is rising. Unrest in the oil rich regions of Russia and Middle East contribute to the volitility in the oild futures market. Russia is again flexing it's military muscle which gives rise to instability in their availablity as a supplier thus forcing a "scare" and buyers are willing to pay higher prices. The instability in the US Dollar. All the government debt spending and the massive round the clock printing of money has started to devalue the US dollar. Since the dollar is only valued on market strength and printing more dollars that have no real value the entire global economy is begining to be scared of the US dollar. World markets ae begining to view the USA as a drunk borrowing (printing) more money to support a habit (spending) that even thought hey have the best sounding promises, they have no intention or ability to repay. China and Saudi Arabia hold much of the new debt and our president will do what ever they tell him so he can continue to borrow more money we have to repay. Oil companies are leary of what the current president and congress is going to do. There is a fear of taxes increses and Cap and Trade so the companies are going to make their money before the taxes hit (which by the way,will be passed on to guess who, me and you) Summer season-probably the only uncontrollable in the socio-polital-financial equation. Memorial day is coming and people drive more during the summer which increases demand so they raise prices.....because they can no other reason, just they can and do. Ever notice how maybe they all rise together because they all agree? On the bright side if the Arabs start under cutting each other again by increasing production or lowering their prices against each other hen prices will decline. If the president ever starts to care what happens to us (fat chance) we will be allowed to drill for our own oil here. You can get an idea of where gas prices are going by watching sweet crude future prices on the exchange. Google Sweet Crude oil price chart. I understand this is not a very pretty picture but that is where it is.


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