the sector model

Disequilibrium can be in either case, aggregate supply exceeding aggregate demand or aggregate demand exceeding aggregate supply. This means that we shall have to add imports and exports and government expenditures and taxation in our analysis.By adding government expenditure (G) to equation (1) of the two-sector model, Y – C + l, we have8. The capitalist sector can either be private or public in nature. The wealthier people Consumption (C), imports (M), savings (S) and taxes (I) are each a fixed proportion of national income (Y) and their relationships with national income are linear.Given all the above mentioned assumptions in which government expenditure is constant, the effects of taxes on national income are illustrated in the following figures.Where S+T+M refers to total income and I+G+X to total expenditure. This leads to net reduction in aggregate demand so that the aggregate demand function C+I+G+(X-M) lies below the domestic demand function C+I+G.The equilibrium level of income can also be shown by the equality of the saving and investment functions. The 45° line is the aggregate supply function which rep­resents C+S+T.2. Presence of low-income groups near industries supports Hoyt Model. The industrial sector would remain industrial as the area would have a typical advantage of a railway line or river. Assumptions of the Lewis Model: (A) Surplus Labour in the Subsistence Sectors: I is investment demand which is autonomous. A model of the internal structure of cities in which social groups are arranged around a series of sectors, radiating from the CBD. This model has a couple of advantages. The saving and investment functions intersect at point E which determines the equilibrium level of income OY.We explain these two approaches one by one with the help of Figure 1 (A) and (B).Similarly, by adding government expenditure (G) to the saving and investment equation, when we haveThe 45° line represents the aggregate supply function, Y = C+S. It does not use reproducible capital. Concentric Zone Model aka Burgess Model Latin American City Model aka Griffin-Ford Model The concentric zone model was created by Ernst Burgess in 1923. There is less than full employment in the economy.The determination of equilibrium level of income simultaneously by the equality of aggregate demand and aggregate supply and of saving and investment is explained in Table I below.7. Sector Model. 3. This area is clean, has less traffic, quiet and has large houses. Corridor or spine extending from CBD to the edge has the best housing.Hoyt Model is somewhat similar to Burgess Model and is often considered as its improvised version. It has more linkages with CBD along with some linkages to industries. The general price level is constant up to the full employment level.In the above analysis, C+S+T is gross national income (GNI) and C+I+G+(X-M) is gross national expenditure (GNE). Features of sector model.

Closeness to industries reduces the travel cost and thus attracts industrial workers. The essence of the development process in such an economy is “the transfer of labour resources from the agricultural sector, where they add nothing to production, to the more modern industrial sector, where they create a surplus that may be used for further growth and development.”. The economy is at less than full employment level of output.5. Beyond point D,C+I+G>C+I+G+(X- M) and imports exceed exports, and this gap continues to grow as income increases. The domestic economy’s international trade is small relative to total world trade.5. We are convinced that as the South African Legislative Sector positions itself and gets ready for the roll-out of the Oversight Model, Legislatures will be able to produce outputs that are aligned with the Legislative Sector's strategic objectives and mandate. The money wage rate is constant.3. Activities in a sector are considered to be the same throughout the sector because of the purpose/function it serves. C is the consumption function which indicates the relation between income and consumption expenditure.Before publishing your articles on this site, please read the following pages:3. Since the equilibrium level of income is determined when aggregate supply (C+S) equals aggregate demand (C + I) in the economy, intended (or planned) saving also equals intended (or planned) investment. It uses poor techniques of production and has very low productivity. This area has the most significant residential area. Investment relates to net investment after deducting depreciation.This analysis shows that in the absence of foreign trade, the equilibrium level of income would have been at a higher level, as determined by the equality of C+I+G=C+S+T at point F whereas with foreign trade it is at a lower point E.It is clear from the above equation that when planned investment (I) plus government expenditure on goods and services (G) equal planned saving (S) plus tax (T), the equilibrium of national income is established. With the increase in the rate of tax, consumption and national income will decrease and vice versa.

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