Write about three linked models of macroeconomics.

ENGR.ECONOMIC ANALYSIS
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Write about three linked models of macroeconomics.

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Macroeconomics: It is the study of aggregate demand and aggregate supply at macro level. The term macro is derived from the Greek word makros, which means large. 

Macro economics is also called income theory is concerned with the analysis of the economy as a whole and its large aggregate or averages such as total national income and output, total employment, aggregate demand and supply and general price level.

 There are three models in macroeconomics which play vital role in calculation of national income of the economy.

  • Two sector model: In this model two sectors are existed which are business sector and household sector which depends on each other. 
  • Three sector model: In there sector model three sectors are existed which are producer, household, government. 
  • Four sector model: In four sector model four sectors are existed which are producer, household, government, and foreign sector. 

 

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