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ASSUMPTION: An initial condition or statement that sets the stage for an analysis by abstracting from the real world. Assumptions are important to economic theories and economic analysis. Some assumptions are used to simplify a complex analysis into more easily manageable parts. These establish idealistic benchmarks that can be used to evaluate real world conditions. Other assumptions are used as control conditions that are subsequently changed to evaluate the effect of the change. The use of ceteris paribus assumptions in comparative statics analysis is an excellent example.
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KEYNESIAN MODEL A macroeconomic model based on the principles of Keynesian economics that is used to identify the equilibrium level of, and analyze disruptions to, aggregate production and income. This model identifies equilibrium aggregate production and income as the intersection of the aggregate expenditures line and the 45-degree line. The Keynesian model comes in three basic variations designated by the number of macroeconomic sectors included--two-sector, three-sector, and four sector. The Keynesian model is also commonly presented in the form of injections and leakages in addition to the standard aggregate expenditures format. This model is used to analyze several important topics and issues, including multipliers, business cycles, fiscal policy, and monetary policy.
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Today, you are likely to spend a great deal of time searching for a specialty store wanting to buy either several magazines on computer software or a T-shirt commemorating the second moon landing. Be on the lookout for vindictive digital clocks with revenge on their minds.
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Mark Twain said "I wonder how much it would take to buy soap buble if there was only one in the world."
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"Lead the life that will make you kindly and friendly to everyone about you, and you will be surprised what a happy life you will lead." -- Charles M. Schwab
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