14.02 Principles of Macroeconomics Problem Set 1 Fall 2004
... Part I. True/False/Uncertain Justify your answer with a short argument. 1. From 1960 to 2000, the US, EU, and Japan all have experienced similar rates of unemployment. 2. GDP is the value of all goods and services produced in the economy. 3. The Phillips Curve describes the negative relationship bet ...
... Part I. True/False/Uncertain Justify your answer with a short argument. 1. From 1960 to 2000, the US, EU, and Japan all have experienced similar rates of unemployment. 2. GDP is the value of all goods and services produced in the economy. 3. The Phillips Curve describes the negative relationship bet ...
Outline Notes
... Is there a rate of unemployment and level of GDP growth that the economy will adjust back to naturally after it is moved off-track? If the answer to this question is “yes” then there is no need for fiscal or monetary policy, except to make short-term adjustments. We just spent weeks going over the i ...
... Is there a rate of unemployment and level of GDP growth that the economy will adjust back to naturally after it is moved off-track? If the answer to this question is “yes” then there is no need for fiscal or monetary policy, except to make short-term adjustments. We just spent weeks going over the i ...
UNEC-ISE Macroeconomics Final Exam Dr. Muslum Ibrahimov
... 11. Provide rules for computing GDP. What is included and what is not. Provide different ways of GDP calculation. 12. What determines the total production of goods and services? Talk about factors of production and production function. 13. Discuss natural rate of unemployment, what is steady state l ...
... 11. Provide rules for computing GDP. What is included and what is not. Provide different ways of GDP calculation. 12. What determines the total production of goods and services? Talk about factors of production and production function. 13. Discuss natural rate of unemployment, what is steady state l ...
If you were invited to give a talk to a group of citizens in Shanghai
... Kydland and Prescott(1977): the inability of policymakers to commit themselves to such a lowinflation policy can give rise to excessive inflation despite the absence of a long-run tradeoff. ...
... Kydland and Prescott(1977): the inability of policymakers to commit themselves to such a lowinflation policy can give rise to excessive inflation despite the absence of a long-run tradeoff. ...
Economics 111– Introduction to Economics
... a. A laundry in Seattle purchases a new clothes washer produced in Mexico. b. A laundry in Mexico purchases a new clothes washer produced in the U.S. c. You purchase for your home a new clothes washer produced in the U.S. d. You purchase for your home a new clothes washer produced in France. Note: N ...
... a. A laundry in Seattle purchases a new clothes washer produced in Mexico. b. A laundry in Mexico purchases a new clothes washer produced in the U.S. c. You purchase for your home a new clothes washer produced in the U.S. d. You purchase for your home a new clothes washer produced in France. Note: N ...
Inflation - fiveless|notes
... Note that regulating inflation should always be a government’s first priority as it may lead to a major economic collapse as well as the implementation of currency reforms. Meeting other policy objectives often conflicts with decreasing inflation – e.g. increasing employment, economic growth etc.: P ...
... Note that regulating inflation should always be a government’s first priority as it may lead to a major economic collapse as well as the implementation of currency reforms. Meeting other policy objectives often conflicts with decreasing inflation – e.g. increasing employment, economic growth etc.: P ...
Presentation to the Portland Business Journal CFO of the Year... Portland, Oregon
... governments responded by cutting spending and employment, which have still not recovered. Here’s one way to see the effect those cutbacks have had on the U.S. economy: On a per-person basis, production of goods and services is about 1 percent below its pre-recession peak. But if state and local gove ...
... governments responded by cutting spending and employment, which have still not recovered. Here’s one way to see the effect those cutbacks have had on the U.S. economy: On a per-person basis, production of goods and services is about 1 percent below its pre-recession peak. But if state and local gove ...
Parkin-Bade Chapter 19
... underutilization of labor. For two reasons: The unemployment rate 1. Excludes people who are so discouraged that they have given up looking for jobs. 2. Measures unemployed people rather than unemployed labor hours. So it does not tells us about the number of part-time workers who want full-time job ...
... underutilization of labor. For two reasons: The unemployment rate 1. Excludes people who are so discouraged that they have given up looking for jobs. 2. Measures unemployed people rather than unemployed labor hours. So it does not tells us about the number of part-time workers who want full-time job ...
labor - Karlstads universitet
... On average today, the French (and other Europeans) work one-third fewer hours than do U.S. workers. In the early 1970s Europeans actually worked slightly more hours than did U.S. workers. What explains this dramatic turnaround in the space of just 20 years? Nobel-laureate Edward Prescott of the Fede ...
... On average today, the French (and other Europeans) work one-third fewer hours than do U.S. workers. In the early 1970s Europeans actually worked slightly more hours than did U.S. workers. What explains this dramatic turnaround in the space of just 20 years? Nobel-laureate Edward Prescott of the Fede ...
The importance of inflation expectations
... important, since it allows the sustainable anchoring of economic agents’ expectations. As a direct consequence, their decisions and behaviour will rely to an increasing extent on the information supplied by the central bank, especially if it pursues a transparent communication with the public. Infla ...
... important, since it allows the sustainable anchoring of economic agents’ expectations. As a direct consequence, their decisions and behaviour will rely to an increasing extent on the information supplied by the central bank, especially if it pursues a transparent communication with the public. Infla ...
Ch. 14 Inflation
... Inflation shifts benefits from creditors to debtors Hyperinflation or extremely high rates of inflation devastates an economy causing money to become worthless people turn to barter destroying benefits specialization (higher quality, cheaper products and more leisure time) Deflation – decrea ...
... Inflation shifts benefits from creditors to debtors Hyperinflation or extremely high rates of inflation devastates an economy causing money to become worthless people turn to barter destroying benefits specialization (higher quality, cheaper products and more leisure time) Deflation – decrea ...
Еconomic theory and the New-Keynesian school
... to say that neo - classical revisionists assumed that firms who opted the salaries ...
... to say that neo - classical revisionists assumed that firms who opted the salaries ...
Slide 1 - Spring Branch ISD
... C) No, because the government can refinance the public debt by selling new bonds to pay off holders of maturing bonds. D) No, because most of the public debt is held by foreign nations and they would prefer to refinance the debt. E) No, because most of the public debt is held by American citizens wh ...
... C) No, because the government can refinance the public debt by selling new bonds to pay off holders of maturing bonds. D) No, because most of the public debt is held by foreign nations and they would prefer to refinance the debt. E) No, because most of the public debt is held by American citizens wh ...
Lecture XIII
... • M.Friedman: The Role of Monetary Policy • E.Phelps: Money-Wage Dynamics and LaborMarket Equilibrium Original Phillips curve: • For a period, when long-term average inflation is zero and workers expect the next year’s inflation zero as well. This was true until 1960’s. • Inflation/unemployment trad ...
... • M.Friedman: The Role of Monetary Policy • E.Phelps: Money-Wage Dynamics and LaborMarket Equilibrium Original Phillips curve: • For a period, when long-term average inflation is zero and workers expect the next year’s inflation zero as well. This was true until 1960’s. • Inflation/unemployment trad ...
Measuring the US Economy
... observations. For example, a MA(3) would average the current observation with the previous 2 observations. ...
... observations. For example, a MA(3) would average the current observation with the previous 2 observations. ...
E719_No02_Chapter01
... The economy works well on its own The “invisible hand”: the idea that if there are free markets and individuals conduct their economic affairs in their own best interests, the overall economy will work well Wages and prices adjust rapidly to get to equilibrium Result: Government should have on ...
... The economy works well on its own The “invisible hand”: the idea that if there are free markets and individuals conduct their economic affairs in their own best interests, the overall economy will work well Wages and prices adjust rapidly to get to equilibrium Result: Government should have on ...
Economics 330 (Kelly)
... 2. The more flexible are wages, the less effective are both fiscal and monetary policy in increasing output. TRUE: The length of the “long run” depends on the degree of wage rigidity. The more quickly the costs of factors of production adjust, the more quickly we attain the LRAS curve. Neither monet ...
... 2. The more flexible are wages, the less effective are both fiscal and monetary policy in increasing output. TRUE: The length of the “long run” depends on the degree of wage rigidity. The more quickly the costs of factors of production adjust, the more quickly we attain the LRAS curve. Neither monet ...
ecn211-team-assessment-fall-2011-students
... 28. (LO26) - Assume the economy is in a recessionary gap, and the federal government enacts policies to shift the aggregate demand to the right. If there is complete crowding out, what is the likely outcome in the economy? a. A shift left in the short-run aggregate supply (SRAS) makes the policy ine ...
... 28. (LO26) - Assume the economy is in a recessionary gap, and the federal government enacts policies to shift the aggregate demand to the right. If there is complete crowding out, what is the likely outcome in the economy? a. A shift left in the short-run aggregate supply (SRAS) makes the policy ine ...
Eco 200 – Principles of Macroeconomics
... A higher interest rate results in a reduction in investment and consumption spending ...
... A higher interest rate results in a reduction in investment and consumption spending ...
Izmir University of Economics Name: Department of
... output change as a result of a decrease in investment by $20 million? 19) ______ A) AE line shifts down, increasing equilibrium output and equilibrium expenditures. B) AE line shifts down, decreasing equilibrium output and equilibrium expenditures. C) AE line shifts up, increasing equilibrium output ...
... output change as a result of a decrease in investment by $20 million? 19) ______ A) AE line shifts down, increasing equilibrium output and equilibrium expenditures. B) AE line shifts down, decreasing equilibrium output and equilibrium expenditures. C) AE line shifts up, increasing equilibrium output ...
Phillips curve
... • The natural rate of unemployment depends on various features of the labor market. • Examples include minimum-wage laws, the market power of unions, the role of efficiency wages, and the effectiveness of job search. • The inflation rate depends primarily on growth in the quantity of money, controll ...
... • The natural rate of unemployment depends on various features of the labor market. • Examples include minimum-wage laws, the market power of unions, the role of efficiency wages, and the effectiveness of job search. • The inflation rate depends primarily on growth in the quantity of money, controll ...
Form 7 Economics Syllabus
... Monetary policy revisited Monetary policy in HK Inflation: Causes and Effects Introduction The nature of inflation Causes of inflation - Inflation as a monetary phenomenon - Non-monetary causes of inflation Redistribution effects of inflation Real costs of inflation Inflationary expectation & intere ...
... Monetary policy revisited Monetary policy in HK Inflation: Causes and Effects Introduction The nature of inflation Causes of inflation - Inflation as a monetary phenomenon - Non-monetary causes of inflation Redistribution effects of inflation Real costs of inflation Inflationary expectation & intere ...
Full employment
Full employment, in macroeconomics, is the level of employment rates where there is no cyclical or deficient-demand unemployment. It is defined by the majority of mainstream economists as being an acceptable level of unemployment somewhere above 0%. The discrepancy from 0% arises due to non-cyclical types of unemployment, such as frictional unemployment (there will always be people who have quit or have lost a seasonal job and are in the process of getting a new job) and structural unemployment (mismatch between worker skills and job requirements). Unemployment above 0% is seen as necessary to control inflation in capitalist economies, to keep inflation from accelerating, i.e., from rising from year to year. This view is based on a theory centering on the concept of the Non-Accelerating Inflation Rate of Unemployment (NAIRU); in the current era, the majority of mainstream economists mean NAIRU when speaking of ""full"" employment. The NAIRU has also been described by Milton Friedman, among others, as the ""natural"" rate of unemployment. Having many names, it has also been called the structural unemployment rate.The 20th century British economist William Beveridge stated that an unemployment rate of 3% was full employment. Other economists have provided estimates between 2% and 13%, depending on the country, time period, and their political biases. For the United States, economist William T. Dickens found that full-employment unemployment rate varied a lot over time but equaled about 5.5 percent of the civilian labor force during the 2000s. Recently, economists have emphasized the idea that full employment represents a ""range"" of possible unemployment rates. For example, in 1999, in the United States, the Organisation for Economic Co-operation and Development (OECD) gives an estimate of the ""full-employment unemployment rate"" of 4 to 6.4%. This is the estimated unemployment rate at full employment, plus & minus the standard error of the estimate.The concept of full employment of labor corresponds to the concept of potential output or potential real GDP and the long run aggregate supply (LRAS) curve. In neoclassical macroeconomics, the highest sustainable level of aggregate real GDP or ""potential"" is seen as corresponding to a vertical LRAS curve: any increase in the demand for real GDP can only lead to rising prices in the long run, while any increase in output is temporary.