Macroeconomics problem set 1

When the economy faces higher costs, cost-push inflation occurs and the AS curve shifts upward to higher price levels. Raising interest rates or reducing the supply of money in an economy will reduce inflation.

Problem Set 3 - Macroeconomics ECN 101

The course meets for two lectures per week Tuesdays and Thursdays from 1: In other words, there are economic forces that no system -- either socialist or capitalist -- can overcome.

However, eventually the depreciation rate will limit the expansion of capital: Solve for equilibrium output. The problem is likely to disappear as production increases. Do savings and leakages add up? An increase in the savings rate leads to a temporary increase as the economy creates more capital, which adds to output.

The AD-AS model has become the standard textbook model for explaining the macroeconomy. The IS—LM model represents all the combinations of interest rates and output that ensure the equilibrium in the goods and money markets.

The aggregate demand curve's downward slope means that more output is demanded at lower price levels. Suppose that the economy is characterized by the following behavioral equations: Automatic stabilizers use conventional fiscal mechanisms but take effect as soon as the economy takes a downturn: Bolivia could then be forced to choose between two disastrous alternatives -- a sovereign default, or Venezuela-style hyperinflation.

Economists interested in long-run increases in output study economic growth. The marginal product of capital may be computed using calculus by differentiating the production function and using the capital output ratio or by using the fact that capital's share equals MPK multiplied by K divided by Y.

They note two disturbing facts about Bolivia. Similarly, a declining economy can lead to deflation. Conventional monetary policy can be ineffective in situations such as a liquidity trap. If you have not had this course, you will need to spend some time on material in Part I of your text.


Government spending does not have to make up for the entire output gap. Central bankerswho manage a country's money supply, try to avoid changes in price level by using monetary policy. Macroeconomics is the study of a.

First, monetary policy is generally implemented by independent central banks instead of the political institutions that control fiscal policy. Government spending does not have to make up for the entire output gap. Comment on your result. Although Morales has showed some disturbingly authoritarian tendencies, including doing away with presidential term limits, economically he seems to have turned his country around.1 COURSE NAME ADVANCED MACROECONOMICS 1 () PROFESSOR Luigi Pascali e-mail: [email protected] TERM Winter OVERVIEW (Objectives) The course introduces the major endogenous growth paradigms (Product-Variety and Shumpeterian) and then shows how they can be used to analyze various aspects of the growth process and to think.

Macroeconomics Problem Set 9 1.


An Alternative Aggregate Supply Model The target real wage agreed upon with insiders equals Therefore, nominal wage is fixed at W = 20Pe in the short run where Pe = 2. The production function is given by Y = Q(N) = 20N + 4N2 (1 3)N 3, while the market for the final good is perfectly competitive. Principles of Macroeconomics Problem Set 7 Due May 1, Spring Prof.

Dowell Instructions: Write the answers clearly and concisely on these sheets in the spaces provided. Do not attach extra sheets. 1. Answer briefly: a. What three roles does money play in the economy? 1. medium of exchange 2.

unit of account 3.

Macroeconomics Problem Set 2

store of value b. PROBLEM SET NO 4 (Chapter 30&33) Student #1 Name and ID: Gwee Yi Xuan S, Student #2 Name and ID: Cheah Wei Yun, S, Student #3 Name and ID: Yong Chang Wei Stanley, S, Question 1 Suppose that a country’s inflation rate increase sharply.

Explain the following situations. (1 mark for each). Problem Set 1 Macroeconomics, ECON Poon Poon. Download with Google Download with Facebook or download with email. Problem Set 1 Macroeconomics, ECON Download. Problem Set 1 Macroeconomics, ECON Poon Poon. Principles of Macroeconomics Problem Set 1 Sherif Khalifa 1.

Consider the market for CD players: Supply Demand Quantity Price 15 20 10 The equilibrium price= The equilibrium quantity= 1. 2. Consider the market for CD players. Start from the initial equilibrium. If a new.

Macroeconomics problem set 1
Rated 4/5 based on 77 review