Question
Briefly explain how one or more of the microeconomic components, namely consumption, investment, supply and demand for money influence macroeconomic outcomes and formulations of the
Briefly explain how one or more of the microeconomic components, namely consumption, investment, supply and demand for money influence macroeconomic outcomes and formulations of the following macroeconomic theories:
a. Solow Growth Model
b. The Mundell-Fleming model
c. Neoclassical Model of Investment
Use mathematical equations and graphs where necessary.
Discuss and graphically depict Keynes's three conjectures about the consumption function.
b. Present and explain Keynesian's consumption function that was created from these conjectures.
c. What is meant by "autonomous consumption"?
. Explain the consumption puzzle?
e. How does the Life-Cycle Hypothesis resolve the puzzle?
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