1、Chapter 11. a. True. b. True. c. False. d. True. e. False. f. False.2. a. 1960-98 1997-99- -US 3.1% 3.8%EU 3.1% 2.5%Japan 5.8% -1.0%While the US growth rate higher than its long-run average over the period, the growth rate hasslowed relative to long-run averages in both the EU and Japan over the las
2、t few years.b. Sometimes the economy is growing quickly, other times it is growing slowly or even contracting. The last few years of rapid growth in the US do not imply that the long-run average rate of growth has increased back to its pre-1974 level.3. a. The data in the web page are: Real Gross Do
3、mestic Product,Real Final Sales of Domestic Product, andReal Gross National Product, Quarterly, 1959-96Percent change from preceding quarter-Gross Final sales Grossdomestic of domestic nationalproduct product product-1959: I 8.6 9.2 8.6II 11.2 7.3 11.1III -0.3 5.3 -0.2IV 1.7 -1.3 1.91996: I 1.8 2.6
4、1.8II 6.0 5.2 5.7III 1.0 0.2 0.6IV 4.3 4.5 4.9-suggesting that recessions typically last two-three quarters and that the most severe recessions in that period were the recessions of 1974-75 and 1981-82.b. Percentage Changes in: Output GrowthInflation1968: 4.7 4.4I 7.5 4.7II 7.1 4.1III 3.0 3.8IV 1.8
5、5.51969: 3.0 4.7I 6.2 3.8II 1.0 5.0III 2.3 5.8IV -2.0 5.11970: 0.1 5.3I -0.7 6.0II 0.6 5.7III 3.7 3.4IV -3.9 5.41971: 3.3 5.2I 11.3 6.4II 2.3 5.5III 2.6 4.4IV 1.1 3.3If history simply repeats itself, the United States might have a short recession (lasting perhaps oneyear) accompanied by an accelerat
6、ion in the rate of inflation by about one percentage point.4. a. Banking services, business services.b. Not only has the relative demand for skilled workers increased but the industries where this effect is the strongest are making up a greater fraction of the economy.5. 1. Low unemployment might le
7、ad to an increase in inflation.2. Although measurement error certainly contributes to the measured slowdown in growth, there are other issues to consider as well, including the productivity of new research and accumulation of new capital.3. Although labor market rigidities may be important, it is al
8、so important to consider that these rigidities may not be excessive, and that high unemployment may arise from flawed macroeconomic policies.4. Although there were serious problems with regard to the management of Asian financial systems, it is important to consider the possibility that the flight o
9、f foreign capital from thesecountries worsened the situation by causing a severe stock market crash and exchange rate depreciation.5. Although the Euro will remove obstacles to free trade between European countries, each country will be forced to give up its own monetary policy.* 6. a. From Chapter
10、1: US output 1997=$8b; China output 1996=$.84b. Note that Chinas outputin 1997 is $(.84)*(1.09) b. Equating output for some time t in the future:8*(1.03)t=(.84*1.09)*(1.09)t 8/(.84*1.09)=(1.09/1.03)t 8.737=(1.058)tt =ln(8.737)/ln(1.058) 38yrsb. From Chapter 1: US output/worker in 1997=$29,800; China
11、 output/per worker in 1996=$70029.8*(1.03)t=(.7*1.09)*(1.09)tt65 yearsChapter 21. a. False.b. Uncertain: real or nominal GDP. c. True.d. True.e. False. The level of the CPI means nothing. Its rate of change tells us about inflation.f. Uncertain. Which index is better depends on what we are trying to
12、 measureinflation facedby consumers or by the economy as a whole.2. a. +$100; Personal Consumption Expenditures b. nochange:intermediategoodc. +$200 million; Gross PrivateDomesticFixedInvestment d. +$200 million; Net Exportse. no change: the jet was already counted when it was produced, i.e., presum
13、ably when Delta(or some other airline) bought it new as an investment.*3. a. Measured GDP increases by $10+$12=$22.b. True GDP should increase by much less than $22 because by working for an extra hour,you are no longer producing the work of cooking within the house. Since cooking within the house i
14、s a final service, it should count as part of GDP. Unfortunately, it is hard to measure the value of work within the home, which is why measured GDP does not include it.4. a. $1,000,000 the value of the silver necklaces.b. 1st Stage:$300,000.2ndStage:$1,000,00-$300,000=$700,000. GDP: $300,000+$700,0
15、00=$1,000,000.c. Wages: $200,000 + $250,000=$450,000.Profits: ($300,000-$200,000)+($1,000,000-$250,000-300,000)=$100,000+$450,000=$550,000. GDP:$450,000+$550,000=$1,000,000.5. a. 1998 GDP: 10*$2,000+4*$1,000+1000*$1=$25,0001999 GDP: 12*$3,000+6*$500+1000*$1=$40,000Nominal GDP has increased by 60%.b.
16、 1998 real (1998) GDP: $25,0001999 real (1998) GDP: 12*$2,000+6*$1,000+1000*$1=$31,000Real (1998) GDP has increased by 24%.c. 1998 real (1999) GDP: 10*$3,000+4*$500+1,000*$1=$33,0001999 real (1999) GDP: $40,000.Real (1999) GDP has increased by 21.2%. d. True.6. a. 1998 base year:Deflator(1998)=1; De
17、flator(1999)=$40,000/$31,000=1.29Inflation=29%b. 1999 base year:Deflator(1998)=$25,000/$33,000=0.76; Deflator(1999)=1Inflation=(1-0.76)/0.76=.32=32% c. Yes7. a. 1998 real GDP = 10*$2,500 + 4*$750 + 1000*$1 = $29,0001999 real GDP = 12*$2,500 + 6*$750 + 1000*$1 = $35,500b. (35,500-29,000)/29,000 = .22
18、4 = 22.4%c. Deflator in 1998=$25,000/$29,000=.86Deflator in 1999=$40,000/$35,500=1.13Inflation = (1.13 -.86)/.86 = .314 = 31.4%.8. a. The quality of a routine checkup improves over time. Checkups now may include EKGs, for example. Medical services are particularly affected by this problem due to con
19、stantimprovements in medical technology.b. You need to know how the market values pregnancy checkups with and without ultra-soundsin that year.c. This information is not available since all doctors adopted the new technology simultaneously. Still, you can tell that the quality adjusted increase will
20、 be lower than 20%.*9. a. approximately 2.5% b. 1992 real GDP growth: 2.7%;unemployment rate Jan 92: 7.3%; unemployment rate Jan 93: 7.3%Supports Okuns law because the unemployment rate does not change when the growth rate of real GDP is near 2.5% c. -2 percentage points change in the unemployment r
21、ate; 5 percent GDP growth d. The growth rate of GDP must increase by 2.5 percentage points. Chapter 31. a. True.b. False. Government spending was 18% if GDP without transfers.c. False. The propensity to consume must be less than one for our model to be well defined.d.True. e. False.f. False. The inc
22、rease in output is one times the multiplier.2. a. Y=160+0.6*(Y-100)+150+150 0.4Y=460-60 Y=1000b. YD=Y-T=1000-100=900 c. C=160+0.6*(900)=7003. a. No. The goods market is not in equilibrium. From part 2a, Demand=1000=C+I+G=700+150+150b. Yes. The goods market is in equilibrium.c. No. Private saving=Y-C
23、-T=200. Public saving =T-G=-50. National saving (or in short, saving) equals private plus public saving, or 150. National saving equals investment.4. a. Roughly consistent. C/Y=700/1000=70%; I/Y=G/Y=150/1000=15%.b. Approximately -2%.c. Y needs to fall by 2%, or from 1000 to 980. The parameter c0 nee
24、ds to fall by 20/multiplier,or by 20*(.4)=8. So c0 needs to fall from 160 to 152.d. The change in c0 (-8) is less than the change in GDP (-20) due to the multiplier.5. a. Y increases by 1/(1-c1) b. Y decreases by c1/(1- c1)c. The answers differ because spending affects demand directly, but taxes aff
25、ect demand through consumption, and the propensity to consume is less than one.d. The change in Y equals 1/(1-c1) - c1/(1- c1) = 1. Balanced budget changes in G and T are not macroeconomically neutral.e. The propensity to consume has no effect because the balanced budget tax increase abortsthe multi
26、plier process. Y and T both increase by on unit, so disposable income, and hence consumption, do not change.*6. a. The tax rate ilessthanone.b. Y=c0+c1YD+I+G impliesY=1/(1-c1+c1t1)*c0-c1t0+I+Gc. The multiplier = 1/(1-c1+c1t1) b2 d1/d2.Since a decrease in G reduces output, the condition under which a
27、 decrease in G increasesinvestment is b15, repeated substitution implies, t=5+(t-5)*4%.So, 10=28%; 15=48%.f. Inflation expectations will again be forever wrong. This is unlikely.4. a. t=t-1 + 0.1 - 2ut=t-1 + 2%t =2%; t+1=4%; t+2=6%; t+3=8%.b. t=0.5t + 0.5t-1 + 0.1 - 2utor, t=t-1 + 4%4. c. t =4%; t+1
28、=8%; t+2=12%; t+3=16%d. As indexation increases, low unemployment leads to a larger increase in inflation over time.5. a. A higher cost of production means a higher markup.b. un=(0.08+0.1)/2; Thus, the natural rate of unemployment increases from 5% to 6% as increases from 20% to 40%.6. a. Yes. The a
29、verage rate of unemployment is down. In addition, the unemployment rate is at a historical low and inflation has not risen.b. The natural rate of unemployment has probably decreased.7. An equation that seems to fit well is: t-t-1=6-ut , which implies a natural rate of approximately 6%.8. The relatio
30、nships imply a lower natural rate in the more recent period.CHAPTER 91. F T T F F T T T 2. a. The unemployment rate will increase by 1% per year when g=0.5%. Unemployment will increase unless the growth rate exceeds the sum of productivity growth and labor force growth.b. We need growth of 4.25% per
31、 year for each of the next four years.c. Okuns law is likely to become: ut-ut-1=-0.4*(gyt-5%)3. a. un= 5%b. gyt= 3%; gmt=gyt+t = 11%c. u gyt gmtt-1: 8% 5% 3% 11%t: 4% 9% -7% -3%t+1: 4% 5% 13% 17%t+2: 4% 5% 3% 7%4. a. t-t-1= -(ut-.05)ut- ut-1= -.4*(gmt-t-.03)b. t=6.3%; ut=8.7%t+1=1%; ut+1=10.3%c. u=5
32、%; gy=3%; =-3%;5. a. See text for full answer. Gradualism reduces need for large policy swings, with effects that are difficult to predict, but immediate reduction may be more credible and encourage rapid, favorable changes in inflation expectations. On the other hand, the staggering of wagedecision
33、s suggests that, if the policy is credible, a gradual disinflation is the option consistent with no change in the unemployment rate.b. Not clear, probably fast disinflation, depending on the features in c.5. c. Some important features: the degree of indexation, the nature of the wage-setting process
34、, and the initial rate of inflation.*6. a. un=K/2; sacrifice ratio=.5 b. t=10%; t+1=8%; t+2=6%; t+3=4%; t+4=2%c. 5 years; sacrifice ratio=(5 point years of excess unemployment)/(10 percentage point reduction in inflation)=.5d. t=7.5%; t+1=4.125%; t+2=1.594%; 3 years of higher unemployment for a redu
35、ction of10%: sacrifice ratio=0.3 e. t+1f. Take measures to enhance credibility.7. a. Inflation will start increasing.b. It should let unemployment increase to its new, higher, natural rate.Chapter 101. TTTFFFTU 2. a. Example: France: (1.042)48*5.150=$37.1 k.Germany: $43.4 k; Japan: $76.5 k; UK: $22.
36、5 k; U.S.:$31.7k b. 2.4c. yes.3. a. $5,000b. 2,500 pesos c. $500d. $1,000e. Mexican standard of living relative to the U.S.exchange rate method: 1/10; PPP method: 1/54. a. Y=63b. Y doubles. c. Yes.d. Y/N=(K/N)1/2e. K/N=4 implies Y/N=2. K/N=8 implies Y/N=2.83. Output less than doubles.f. No.g. No. In
37、 part f, we are looking at what happens to output when we increase capital only, not capital and labor in equal proportion. There are decreasing returns to capital.h. Yes.5. The United States was making the most important technical advances. However, the other countries were able to make up much of
38、their technological gap by importing the technologies developed in the United States, and hence, have higher technological progress.6. Convergence for the France, Belgium, and Italy; no convergence for the second set of countriesChapter 111. a. Uncertain. True if saving includes public and private s
39、aving. False if saving only includes private saving.b. False.c.Uncert UTFFd2. a. No. (1) The Japanese rate of growth is not so high anymore. (2) If the Japanese saving rate has always been high, then this cannot explain the difference between the rate of growth inJapan and the US in the last 40 or 5
40、0 years. (3) If the Japanese saving rate has been higher thanit used to be, then this can explain some of the high Japanese growth. The contribution of high saving to growth in Japan should, however, come to an end.3. After a decade: higher growth rate. After five decades: growth rate back to normal
41、, higher level of output per worker.4. a. Higher saving. Higher output per workerb. Same output per worker. Higher output per capita.5.*YYYd. Y/N = (K/N)1/3e. In steady state, sf(K/N) = K/N, which, given the production function in part d, implies: K/N=(s/)3/2f. Y/N =(s/)1/2g. Y/N = 2h. Y/N = 21/26.*
42、 a. 1b. 1c. K/N=.35; Y/N=.71d. Using equation (11.3), the evolution of K/N is: 0.9, 0.82, 0.757. a. K/N=(s/(2)2; Y/N=s/(4) b. C/N=s(1-s)/(4)c-e. Y/N increases with s; C/N increases until s=.5, then decreases.CHAPTER 121.TFTFTFTUF2. a. Lower growth in poorer countries. Higher growth in rich countries
43、.b. Increase in R a (small) decrease in growth.d. A decrease in the appropriability of drug research. A drop in the development of new drugs. Lower technological progress and lower growth.3. See discussion in section 12.2.4. Examples will vary. Weakening patent protection would accelerate diffusion,
44、 but might also discourage R Year 2: 3960b. Real GDP: 3300; output growth: 10%c. 20%d. Real GDP/Worker=30 in both years; productivity growth is zero.e. RealGDP:3990;outputgrowth:33%. f. -0.8%g. Proper measurement implies real gdp/worker=36.3 in year 2. With improper measurement, productivity growth
45、would be 21 percentage points lower and inflation 21% points higher.6. a. Both lead to an initial decrease in growthb. Only the first leads to a permanent decrease in growth7. a. (K/(AN)*=(s/(+gA+gN)2=1; (Y/(AN)*=(1)1/2; gY/(AN)=0; gY/N=4%; gY=6%b. (K/(AN)=(4/5)2; (Y/(AN)*=(4/5); gY/(AN)=0; gY/N=8%;
46、 gY=10%c. (K/(AN)=(4/5)2; (Y/(AN)*=(4/5); gY/(AN)=0; gY/N=4%; gY=10%People are better off in case a. Given any set of initial values, the level of technology isthe same in cases a and c, but the level of capital per effective worker is higher atevery point in time in case a. Thus, since Y/N=A*(Y/(AN
47、)=A*(K/(AN)1/2, output per worker is always higher in case a.8. There is a slowdown in growth and the rate of technological progress in the modern period. Japans growth rate of technological progress is higher because it is catching up to the U.S. level of technology. Not all of the difference in gr
48、owth rates of output per worker is attributable to the difference in rates of technological progress. A big part is attributable to the difference in rates of growth of capital per worker.9.* a. ProbablyaffectsA.Thinkofclimate.b. Affects H.c. Affects A. Strong protection tends to encourage more R real profits are easier to forecast.b. Nominal. The payments are nominal.c. Nominal. If lease payments are in nominal terms, as is typical.3. a. Exact: r=(1+.04)/(1+.02)-1=1.96%; Approximation: r=.04-.02=2%b. 3.60%; 4%c. 5.48%; 8%4. a. No. Otherwise, nobody would hold bonds. Money would be more ap
