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Rules of the Game How do rules of the game affect productivity and growth? What types of rules should a government set to encourage growth?
Basic and Applied Research What is the difference between basic research and applied research?
Show what happens to the nominal interest rate and the equilibrium quantity of loans when both borrowers and lenders increase their estimates of the expected.
Nonincome Determinants of Investment What are some factors assumed to be constant along the investment function?
According to the lifecycle hypothesis, what is the typical pattern of saving for an individual over his or her lifetime?
What, if anything, happens to the saving function when the consumption function shifts? Explain.
What is the value of the spending multiplier? By how much would the real GDP demanded change if investment increased by $100 billion?
What are the components of consumption discussed in the case study? How did each component change in the recession of 2008-2009?
What are the leakages from and injections into the circular flow? How are leakages and injections related in the circular flow?
Read the article The Growth Imperative. What did the author David Brooks suggest as remedies for the poor condition of the U.S. business cycle?
Use an aggregate demand/aggregate supply diagram to show what effect was intended. What might happen if such a tax cut also shifted the aggregate demand curve?
What were some of the causes of the stagflations of 1973 and 1979? In what ways were these episodes of stagflation different from the Great Depression of 1930s?
Case Study: Price Check on Aisle. What is the hedonic method and why is it sometimes used to track changes in the consumer price index?
Consumer Price Index One form of the CPI that has been advocated by lobbying groups. Should the BLS produce such an index for the elderly?
GDP and Depreciation What is gross about gross domestic product? Could an economy enjoy a constant-or growing- GDP while not replacing worn-out capital?
Both goods have been decreasing in price and improving in quality. What problems does this pose for people responsible for calculating a price index?
Using the Internet, identify one (1) example of a large company that has (or might be) engaged in anticompetitive behavior.
Why do you suppose portion of final goods expenditures that goes to pay for intermediate goods or raw materials is excluded from income method of calculation?
Global Economic Watch Go to the Global Economic Crisis Resource Center. Write a summary of an article about a price index in a foreign country.
Calculate the current year's cost of the market basket and the value of the current year's price index.
What factors could make the official rate overstate the actual unemployment rate?
Which had problems with high inflation, the increased use of another country's currency (such as the U.S. dollar or South African rand) became common.
Inflation and Relative Price Changes What does the consumer price index measure? Does the index measure changes in relative prices? Why, or why not?
Explain as carefully as you can why borrowers would be willing to pay a higher interest rate if they expected the inflation rate to increase in the future.
Why is a relatively constant and predictable inflation rate less harmful to an economy than a rate that fluctuates unpredictably?