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An economic model is a theoretical construct representing economic processes by a set of variables and a set of logical and/or quantitative relationships between them. The economic model is a simplified, often mathematical, framework designed to illustrate complex processes.
The rational choice model, also called rational choice theory refers to a set of guidelines that help understand economic and social behaviour. [1] The theory originated in the eighteenth century and can be traced back to the political economist and philosopher Adam Smith . [ 2 ]
Labour economics looks at the suppliers of labour services (workers), the demands of labour services (employers), and attempts to understand the resulting pattern of wages, employment, and income. In economics, labour is a measure of the work done by human beings.
A Robinson Crusoe economy is a simple framework used to study some fundamental issues in economics. [1] It assumes an economy with one consumer, one producer and two goods. The title "Robinson Crusoe" is a reference to the 1719 novel of the same name authored by Daniel Defo
An easy money policy is a monetary policy that increases the money supply usually by lowering interest rates. [1] It occurs when a country's central bank decides to allow new cash flows into the banking system. Since interest rates are lower, it is easier for banks and lenders to loan money, thus likely leading to increased economic growth. [2]
[8] [9] [10] When Ronald Reagan was giving speeches to General Electric plants in the 1950s and 60s, he read Economics in One Lesson [11] which helped influence his economic philosophy. [12] [13] Economics in One Lesson was an important work for the development of neoliberalism in America. [14]
The cobweb model or cobweb theory is an economic model that explains why prices may be subjected to periodic fluctuations in certain types of markets.It describes cyclical supply and demand in a market where the amount produced must be chosen before prices are observed.
In statistics, economics,and finance, an index is a statistical measure of change in a representative group of individual data points. These data may be derived from any number of sources, including company performance, prices, productivity, and employment. Economic indices track economic health from different perspectives.