Economic Systems

Economic systems are abstractions of physical systems with human beings where only so-called economic aspects are studied, e.g. money flow, monetary value, production, consumption, etc. Complete economic systems are intrinsically quite complex, especially since they to a large extent depend on human behavior.The subject area denoted national economy deals with the economic behavior of nations. Models of national economies often include variables such as GNP (Gross National Product), the total consumption of a nation, the total investments, and the government expenses of the nation. In particular, according to the simple Keynesian multiplier-accelerator model, the following approximate relation holds.

GNPt= consumptiont + investmentst expensest



Let us make a simple Modelica model based on the above equation