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THREE-SECTOR INJECTIONS-LEAKAGES MODEL: A model used to identify equilibrium in Keynesian economics based on injections (investment and government purchases) and leakages (saving and taxes) for the three domestic sectors (household, business, and government). Equilibrium is achieved at the intersection of the saving and tax line, S + T, and the investment and government purchases line, I + G.
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ASSUMPTIONS, CLASSICAL ECONOMICS Classical economics, especially as directed toward macroeconomics, relies on three key assumptions--flexible prices, Say's law, and saving-investment equality. Flexible prices ensure that markets adjust to equilibrium and eliminate shortages and surpluses. Say's law states that supply creates its own demand and means that enough income is generated by production to purchase the resulting production. The saving-investment equality ensures that any income leaked from consumption into saving is replaced by an equal amount of investment. Although of questionable realism, these three assumptions imply that the economy would operate at full employment.
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ORANGE REBELOON
[What's This?]
Today, you are likely to spend a great deal of time surfing the Internet trying to buy either software that won't crash your computer or any book written by Stephan King. Be on the lookout for telephone calls from long-lost relatives.
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This isn't me! What am I?
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Al Capone's business card said he was a used furniture dealer.
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"It is part of the American character to consider nothing as desperate. " -- President Thomas Jefferson
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LRTC
Long Run Total Cost
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