Does supply side model only works for a country where public equity plays a dominant role or it works well for a private dominant economy too? Doubt in the explanation to Q 5, in item set 1 of additional practice questions
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It seems that the model mostly is appropriate for Public Equity dominated markets. As for Private dominant countries, we can’t say that it won’t work, because, Private Companies are also affected by Macroeconomic Factors like Inflation and all. So, as a conclusion, you may say that the model works better for Public Equity dominated economies.
So it is clear from the language in the core that Macroeconomic Models are applicable both in a Public as well as Private Dominated Economy – but, they work better in a Public dominated Economy.
Also there may be a country where we have a public domination, but the question requires us, to answer about a Private co. which is going Public, obviously – Macroeconomic Models are totally applicable over here.