Fill This Form To Receive Instant Help

Help in Homework
trustpilot ratings
google ratings


Homework answers / question archive / What are the assumptions underlying the three macro models for establishing long-run economic growth?

What are the assumptions underlying the three macro models for establishing long-run economic growth?

Economics

What are the assumptions underlying the three macro models for establishing long-run economic growth?

pur-new-sol

Purchase A New Answer

Custom new solution created by our subject matter experts

GET A QUOTE

Answer Preview

The assumptions in the macroeconomic models for establishing long-run growth are:

1.) In the long run, the model is designed in nominal terms. It includes the effect of inflation in cost or revenue.

2.) Another assumption of the macroeconomic model is the risk-free interest rate. The minimum expected return of investors is estimated by using risk-free assets.

3.) When the borrowings are in foreign currency or if there is any source of foreign capital, exchange rates are a relevant concept.