The conceptual model of any process of price dynamics includes the interaction of three subsystems, which can be conditionally called “commodity producer”, “consumer” and “market” (Fig.7.17.). The spider-like model (model A), in which demand lags behind supply by one period: D(Pt+1)=S(Pt), also fits into the scheme of Figure 7.17. Rice. 7.17. Conceptual scheme of the […]
Tag: Movement
Problems posed by TNCs in host countries
Serious claims are also being made against TNCs in host countries. The most important of these claims is the dominant role of TNCs in the national economy. For example, even in a country as large as Canada, 60% of the capital in the processing industry is owned or controlled by foreigners. And 40% are American […]
Overall macroeconomic equilibrium
Aggregate Demand and Aggregate Supply Model (AD-AS) The equilibrium of supply and demand in the national economy is reached at the intersection of the aggregate demand and aggregate supply curves (Figure 8.2). Suppose the price level is P1. At this level, supply would be Q1 and demand would be Q2. Since demand exceeds supply, competition […]