what are the assumptions made about the economy in the classical model?

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Classical small open economy model: According to the Classical small open economy model, what happens to...

Classical small open economy model: According to the Classical small open economy model, what happens to domestic national saving, investment, the trade balance, and the real exchange rate in response to each of the following events? Draw a loanable funds market diagram and a net exports diagram to illustrate your answer in each case. (For these diagrams, let’s assume that the country starts out running a current account surplus and capital account deficit, as in the examples in class.) a)...

(1)What are the ASSUMPTIONS of the Classical Model in econometrics? What happens when each of the...

(1)What are the ASSUMPTIONS of the Classical Model in econometrics? What happens when each of the assumptions are violated? Answers are provided in chapter 4 of the required text book for the class. The title of the chapter is “ The Classical Model”

Discuss the main assumptions of a classical linear regression model.

For IEUBK Model) 1.What assumptions are made when using this type of model? That is what...

For IEUBK Model) 1.What assumptions are made when using this type of model? That is what values or relationships must the model include, which you did not supply. 2.What are the model supplied (“fixed") parameters which are assumed? 3.What are the user-supplied input variables required to run the model?

What is the main assumptions about the behaviour of the disturbance term in the Classical Linear...

What is the main assumptions about the behaviour of the disturbance term in the Classical Linear Regression Model (CLRM). Briefly explain the meaning of each assumption.

4) Explain the two main differences in the assumptions made by the Classical and Keynesian theories...

4) Explain the two main differences in the assumptions made by the Classical and Keynesian theories and the consequences of these for the business cycle?

5. Under the Classical Linear Regression model assumptions, which one of the following is not a...

5. Under the Classical Linear Regression model assumptions, which one of the following is not a required assumption about the error term ui? * a. There is no multicollinearity in the model b. The variance of the error term is the same for all values of x. c. The values of the error term are independent. d. The error term is normally distributed. 6 If you find a positive value of the correlation coefficient it implies that the slope of...

List the three assumptions of the classical model, and illustrate how a negative shock to AD...

List the three assumptions of the classical model, and illustrate how a negative shock to AD would affect the labor market and the market for goods and services. Then show how a sudden desire on the part of households to save more would affect the market for loanable funds , as well as total demand for goods and services in the classical system. In both parts, explain clearly and label all graphs completely.

What are the model assumptions of the ARIMA (2,2,3) model?

According to the Classical small open economy model, what happens to domestic national saving, investment, the...

According to the Classical small open economy model, what happens to domestic national saving, investment, the trade balance, and the real exchange rate in response to each of the following events? Draw a loanable funds market diagram and a net exports diagram to illustrate your answer in each case. (For these diagrams, let’s assume that the country starts out running a current account surplus and capital account deficit, as in the examples in class.) (a) The introduction of a stylish...

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