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In macroeconomics, a multiplier is a factor of proportionality that measures how much an endogenous variable changes in response to a change in some exogenous variable. For example, suppose variable x changes by k units, which causes another variable y to change by M × k units.
The costate variables () can be interpreted as Lagrange multipliers associated with the state equations. The state equations represent constraints of the minimization problem, and the costate variables represent the marginal cost of violating those constraints; in economic terms the costate variables are the shadow prices.
A diagram of the Ripple effect illustrating how the "Weinstein Scandal" led all the way to the rise of the Me Too movement.A ripple effect occurs when an initial disturbance to a system propagates outward to disturb an increasingly larger portion of the system, like ripples expanding across the water when an object is dropped into it.
Also called resource cost advantage. The ability of a party (whether an individual, firm, or country) to produce a greater quantity of a good, product, or service than competitors using the same amount of resources. absorption The total demand for all final marketed goods and services by all economic agents resident in an economy, regardless of the origin of the goods and services themselves ...
In simpler terms, it is the acceleration or deceleration of economic growth that shapes businesses' choices regarding investments. [1] The accelerator effect operates in reverse as well: when the GDP declines (entering a recession), it negatively impacts business profits, sales, cash flow, capacity utilization, and expectations.
The most widely used nomenclature for describing yield curve changes uses the terms "shift", "twist" and "butterfly". Briefly: shift measures the degree to which a curve has moved upwards or downwards, in parallel, across all maturities; twist measures the degree to which the curve has steepened or flattened.
The multiplier–accelerator model can be stated for a closed economy as follows: [3] First, the market-clearing level of economic activity is defined as that at which production exactly matches the total of government spending intentions, households' consumption intentions and firms' investing intentions.
Additionally, the model distinguishes between the policy interest rate determined by the central bank and the market interest rate which is decisive for firms' investment decisions, and which is equal to the policy interest rate plus a premium which may be interpreted as a risk premium or a measure of the market power or other factors ...