多恩布什＜宏观经济学＞第八版第一章英文答案

1、Problems1. "A country's rate of economic growth is determined solely by the amount of resources available to the country." Comment on this statement.Increases in the availability of resources, that is, labor and capital used in the production of goods and services account for only part

2、 of a nation's economic growth. The efficiency with which these factors of production are used also affects economic growth. Increases in the efficiency of production result from increases in the education and skill levels of the labor force and from newer and more efficient technology. In addit

3、ion, the factors of production are not fully employed all the time. During an expansion or recovery, the use of the factors of production increases, which leads to an increase in production and output. 2. In the 1960s, increases in the rate of unemployment were generally associated with decreases in

4、 the inflation rate and vice versa. But in the 1970s and 1980s unemployment and inflation often moved in the same direction. How can you explain this?A shift in aggregate demand causes the unemployment rate and the inflation rate to move in opposite directions, whereas a shift in aggregate supply ca

5、uses unemployment and inflation to move in the same direction. Most disturbances in the 1960s came from the demand side, while many of the disturbances in the 1970s and 1980s came from the supply side.3. "Since the long-run AS-curve is vertical, we can conclude that the total real output of a n

6、ation cannot grow in the long run." Comment on this statement.The AD-AS framework is a static framework that assumes that the level of potential GDP is fixed. However, the potential GDP of a nation grows over time as the amount of available resources or the efficiency with which these resources

7、 are used increases. Figure 1-4 in the text clearly indicates that the long-run (vertical) AS-curve moves to the right by a small percentage each year.4. "Long-run growth can best be studied by focussing on the reasons for business cycles." Comment on this statement.Growth theory focuses p

8、rimarily on the accumulation of inputs and improvements in technology that allow for an increased standard of living over time. Since growth theory tries to explain the average growth rate of an economy over many years, it ignores the short-run fluctuations (recessions and booms) that occur over the

9、 course of business cycles. 5. "In the very short run real output is fixed and therefore any increase in aggregate demand will simply increase the price level but not affect how many goods and services are produced in an economy." Comment on this statement.The short-run AS-curve is complet

10、ely horizontal, based on the assumption that prices are constant. An increase in aggregate demand will therefore increase the level of output but will not affect the price level. It follows therefore that in the short run the level of output is solely determined by aggregate demand.6. "There is

11、 always a clear tradeoff between unemployment and inflation." Comment.The short-run Phillips curve describes an empirical relationship between wage and price inflation and the rate of unemployment. This curve shows that the higher the rate of unemployment, the lower the rate of inflation and vi

12、ce versa (at least in the short run). However, in the long run there is no clear-cut tradeoff between inflation and unemployment. The economic events of the 1970s and 1980s showed us that unemployment and inflation can increase or decrease simultaneously.7. The index of leading economic indicators i

13、s supposed to signal future developments in the economy and is calculated from variables in different sectors of the economy. Pick one leading economic indicator from each of the following sectors and briefly state the rationale for including this indicator in the calculation of the index: (1) the l

14、abor sector, (2) business activity, (3) the financial sector, and (4) residential construction. The answer to this question is student specific. Here is a sample answer.The labor sector:Employment figures as well as the unemployment rate should be used to look for changes in the labor sector. The un

15、employment rate is more often discussed in the media, but the employment figures have smaller cyclical variations and are thus a better indicator of labor market conditions.Business activity: New orders, changes in inventories, capacity utilization, and industrial production are often used to interp

16、ret business activity. When using inventory changes it is important to distinguish between desired inventory changes, which may reflect changes in business expectations, and undesired inventory changes that reflect changes in the demand for the product.The financial sector: Stock market activity, ch

17、anges in money supply, or credit conditions can be used to show trends in financial markets. While the relationship between changes in stock values and the economy is not as close as it used to be, a continued increase in stock prices generally reflects increased optimism about future economic condi

18、tions. It also means an increase in wealth for stockholders and easier access to funds for firms wishing to make new investments.Residential construction: A change in new building permits or housing starts may be the first sign of changing economic conditions. The housing sector is very sensitive to

19、 interest rate changes and tends to be indicative of other sectors of the economy, which often react in a similar way although to a lesser degree and with a time lag.8. Briefly discuss the usefulness of each of the following as leading economic indicators: (i) inventory changes, (ii) the GDPdeflator

20、, (iii) the unemployment rate, (iv) the Dow Jones Industrial Average. Desired inventory changes reflect changes in business expectations and can be used as a leading economic indicator. But undesired inventory changes reflect changes in demand for the product and are therefore a lagging economic ind

21、icator. Only if one can separate out desired from undesired inventory changes, will it be possible to spot more clearly signs of an upcoming boom or recession. The GDPdeflator is the most complete price index, since it measures price changes of all final goods and services currently produced in a co

22、untry. But the GDPdeflator is a lagging indicator, showing what has happened over the last quarter. In addition, initial GDP data tend to be fairly unreliable and have to be frequently revised. The unemployment rate has fairly small cyclical variations and is used as a measure for variations in the

23、demand for labor. Changes in the unemployment rate also correspond well with changes in GDP. But the unemployment rate is a concurrent indicator.Changes in stock values generally reflect changes in expectations of financial investors about dividends. If stock values go up people may feel wealthier a

24、nd thus consumer spending may increase. Firms may have an easier time issuing new stock and thus they may invest more. In this case, we can expect an economic upswing. However, changes in stock values often may simply be due to speculative behavior and may not be related to real economic activity. 9

25、. In each of the three pairs below, which variable would you choose (and why) as a leading economic indicator: (i) labor productivity or the unemployment rate (ii) the CPI or the PPI (iii) stock market changes or housing startsLabor productivity generally shows long run trends in the labor market an

26、d will determine wages and therefore living standards. It is a leading indicator, but cannot be easily used for forecasting. The unemployment rate has fairly small cyclical variations and is used as a measure for variations in the demand for labor. It is a very accurate measure of economic performan

27、ce-at least as far as the labor sector is concerned. However, the unemployment rate is a concurrent and not a leading indicator. The CPI measures the price increase of a fixed market basket of 386 goods and services purchased by an average urban family. The CPI is easily available and is supposed to

28、 measure cost of living increases. However, the CPI is a concurrent indicator.The PPI measures average price changes of a market basket of over 1,000 intermediate goods up to the retail stage. It is relatively easily available and shows future price trends with relative accuracy. The PPI is a leading indicator and does not always correspond exactly with the CPI.Stock market changes reflect changes in expectations of financial investors about dividends arising from a perceived change in economic conditions. If stock values increase consumers may feel wealthier (and thus spen