The Closed Economy Model

Related BrainMass Solutions

• equilibrium GDP in the Keynesian model of a closed economy

  equilibrium GDP in the Keynesian model of a closed economy.

• Create an augmented matrix to repsent an economy under the Closed Leontief Model

  433691 Create an augmented matrix to repsent an economy under the Closed Leontief Model A closed model for an economy identifies government, the profit sector, the nonprofit sector, and households as its industries.

• Injection-leakage model

  To show this we can look into the simplified model of closed economy without government.

• Aggregate Expenditure Model in Closed Economy

  536234 Aggregate Expenditure Model in Closed Economy In the aggregate expenditure model, assume that the consumption function is given by C = 800 + 0.58(Y - TP), that planned investment (I) equals 250, and that government purchases (G) and taxes (TP)

• Solow growth: Compute the current US investment rate (I/Y)

  For simplicity assume that the US is a closed economy so that Y = C + G + I where Y is GDP, C is private consumption, G is government consumption and I is investment.

• Saving: Investment in a circular flow

  This relationship is true because of the simplified economy. Once we add government and international trade in the model, the saving-investment equality may not hold.

• Input Output Analysis

  On the contrary if the consumer sector is also considered as a production sector, the system under consideration is known as a closed system.

• Closed and Open Economic Systems

  The Closed System: A closed system is a purely theoretical model of a system of production that takes nothing from without and adds nothing to the external world.

• MPC and Marginal Propensity to Import (MPm)

  In an open economy, MPC = 0.6, MPm = 0.2. This implies that: A) MPS in the open economy is lower than in the closed economy. B) MPS = 0.4 only if the economy were closed.