A comparison of the classical and the Keynesian models of income determination are given below: The classical and the Keynesian models, given above in the notational form, refer to the working of the macro – level economic system in three markets, i.e. product, labour and money. All the equations are functions of real values. Equations […]
Classical and Keynesian Models of Income Determination Compared
Article shared by : 
National Income Determination in an Open Economy | Macroeconomics
Article shared by : 
We may now present the four-sector model of national income determination by taking into account foreign trade, i.e., exports and imports. Now the economy has four sectors, viz., the households sector, the business sector, the government sector and the foreign trade (or the rest of the world) sector. We include the foreign trade in our […]
The Keynesian Three-Sector Model of National Income | Macroeconomics
Article shared by :
Since the government plays a very important role in a modern economy, we include the government in the analysis of income determination. The government is the third basic unit of an economy. Its basic objective is to create more jobs, promote faster economic growth and thus ensure maximum welfare. This is why it spends lots […]