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What happens to output, the interest rate, and the price level in the medium run? What happens to consumption and investment in the medium run?
What is the value added at each stage of production? Using the value-added approach, what is GDP? What are the total wages and profits earned?
Okun's law stated that when output growth is higher than usual, the unemployment rate tends to fall. Explain why usual output growth is positive.
In percentage terms, how much of a quality increase does the new method represent over the old method?
By how much does measured GDP increase? Do you think the increase in measured GDP accurately reflects the effect on output of your decision to work? Explain.
Assume that the potato chip industry in the Northwest in 2011 was competitively structured. Compare the perfectly competitive outcome with the monopoly outcome.
What are the latest monthly data on the size of the U.S. civilian labor force, on the number of unemployed, and on the unemployment rate?
Compute the proportion of unemployed who have been unemployed six months or more (27 weeks or more) for each year between 1996 and 2010.
How would you measure the value of work at home in GDP? How would you alter the definitions of employment, unemployment, and out of the labor force?
What do your answers imply about the relative bargaining power of workers and firms when the unemployment rate is very low?
Illustrate the effect of such a policy mix on output. How does this policy mix differ from the Clinton-Greenspan mix?
If a firm is considering using its own funds to finance investment projects, will higher interest rates discourage the firm from undertaking these projects?
How would you expect such a shift away from checkable deposits toward currency to affect the size of the money multiplier?
What is the demand for central bank money? What is the impact on the interest rate if central bank money is increased to $300 billion?
What is the amount of money this person holds, on average? Suppose now that with the advent of ATMs, this person withdraws money once every two days.
You learned that an increase in the interest rate makes bonds. How can an increase in the interest rate make bonds more attractive and reduce their price?
What are the effects of an increase in wealth on the demand for money and the demand for bonds? Explain in words.
What is the relation between the price of the bond and the interest rate? If the interest rate is 8%, what is the price of the bond today?
How will reducing the deficit in either way affect the equilibrium level of output in the short run?
What was the unemployment rate in the last month of the last quarter of negative growth? By how much did the unemployment rate increase?
How many quarters has each recession lasted? In terms of length and magnitude, which two recessions have been the most severe?
Calculate the total change in the deficit as a percent of GDP between 2011 and most recent data. Now split the change in the deficit since 2011.
How has China raised its output per person in the last two decades? Are these methods applicable to the United States?
What can be wrong about joining forces and adopting a common currency? The euro is obviously good for Europe.
Suppose that the MILC program had no cap. What would be the effects on aggregate surplus, consumer surplus, producer surplus, and government revenue?