The Macro Model. National Income Chapter 10. Apple CEO Steve Jobs. Graphing the Macro Model. The vertical axis of the measures the Price Level, rather than Price in the Micro Model The horizontal axis of the measures Real GDP, rather than quantity of micro model Price Level = PL
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The Macro Model
Interest Rate Effect - if prices rise the real value of money goes down, therefore the demand to borrow money increases, driving up interest rates. Conversely if prices fall, interest rates fall.