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What is investment? Is national defense a large fraction of government spending? Why does the base year matter in calculating real GDP?
Explain three problems in measurement of real GDP. What are differences and similarities among private sector saving, government saving, and national saving?
Determine GDP in this economy during this year using the product and expenditure approaches.
Using year 1 as the base year, calculate the GDP price deflator in years 1 and 2, and calculate rate of inflation between years 1 and 2 from GDP price deflator.
Carefully explain how price controls present a problem for measuring GDP and for measuring the price level and inflation.
How underground transactions might take place by other means in the United States than through the use of U.S. currency?
Discuss the implications that such criminal financial activity has for the measurement of GDP.
Why is the marginal product of labor diminishing? What are the effects on the production function of an increase in total factor productivity?
How is the representative consumer's behavior affected by an increase in real taxes? Why might hours worked by the representative consumer decrease?
What is the representative consumer's goal? How are these properties associated with the properties of the consumer's preferences?
What goods do consumers consume in this model? How are a consumer's preferences over goods represented?
Which of the components of investment shows the most (least) variability, in terms of its contribution to the variability in real GDP?
Does a Phillips curve relationship exist in the data set that was studied in this chapter? What are the key business cycle regularities in the labor market?
Why is the index of leading economic indicators useful for forecasting GDP? What are the three features of comovement that macroeconomists are interested in
Why are the comovements in aggregate economic variables important? What did Robert Lucas say about the comovements among economic variables?
What is the primary defining feature of business cycles? Besides persistence, what are three important features of the deviations from trend in GDP?
Plot this variable, and comment on how it has evolved over time, particularly during the last recession.
Calculate 12-month percentage rates of increase in each of these measures from 2000 up to the present, compare, and discuss.
Determine: the participation rate; the labor force; the number of employed workers; and the employment/population ratio.
Why do the statistics indicate that there might be some large measurement error in the official U.S. national income accounts.
Suppose there are two types of jobs in the labor market: safe jobs and risky jobs. Describe how the worker decides whether to accept a safe job?
What calculations must you make to determine NI from GNP? NI is composed of a number of categories. What category makes up the largest portion of NI?
List six fundamental macroeconomic questions. In a graph of the natural logarithm of an economic time series, what does the slope of the graph represent?
What is the difference between the trend and business cycle component of an economic time series? Explain why experimentation is difficult in macroeconomics.
Should a macroeconomic model be an exact description of the world? Why can macroeconomic models be useful? How do we determine whether or not they are useful?