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In economics, an input–output model is a quantitative economic model that represents the interdependencies between different sectors of a national economy or different regional economies. [1] Wassily Leontief (1906–1999) is credited with developing this type of analysis and earned the Nobel Prize in Economics for his development of this ...
An example of real GDP (y) plotted against time (x).Often time is denoted as t instead of x. The IS curve moves to the right if spending plans at any potential interest rate go up, causing the new equilibrium to have higher interest rates (i) and expansion in the "real" economy (real GDP, or Y).
An economic impact analysis is commonly developed in conjunction with proposed legislation or regulatory changes, in order to fully understand the impact of government action on the economy. The United States Department of Energy economic impact model is one example of this type of application. [16]
Trump initially promised during his campaign to institute a 10-20% tariff on all imports, and as high as 60% on goods from China. Economists worry that his tariff plan will raise the prices of ...
The factor equalization theorem (FET) applies only to the most advanced countries. The average wage in Japan was once as big as 70 times the wage in Vietnam. These wage discrepancies are not normally in the scope of the H–O model analysis. [16] Heckscher–Ohlin theory is badly adapted to the analyze south–north trade problems.
The concept may be applied to an entire economy for the alternatives of autarky (no trade) or trade. A measure of total gains from trade is the sum of consumer surplus and producer profits or, more roughly, the increased output from specialization in production with resulting trade. [ 8 ]
The circular flow of income is a concept for better understanding of the economy as a whole and for example the National Income and Product Accounts (NIPAs). In its most basic form it considers a simple economy consisting solely of businesses and individuals, and can be represented in a so-called "circular flow diagram." In this simple economy ...
If exports exceed imports, it is sometimes called a favourable balance of trade. Includes all those visible and invisible items exported from and imported into the country in addition to exports and imports of merchandise. Includes revenues received or paid on account of imports and exports of merchandise. It shows only revenue items.