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The indicators we chose as meaningful are also ones used by the Federal Reserve to determine interest rates, automatically validating them as important.
The trade deficit is one of the aggregate demand
The first formal macroeconomics model introduced by the text is called the Aggregate Supply Aggregate Demand Model, which will hereafter be referred to as the AS/AD model. The AS/AD model
is useful for evaluating factors and conditions which effect the level of Real Gross Domestic Product(GDP adjusted for inflation) and the level of inflation. Like the microeconomic model, the AS/AD model is a comparative statics model...
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