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What impact will this change have on the price level, output, and employment in the short run in the United States? In the long run?
How will this pessimism affect the speed and strength of the recovery? Feel free to use the data of Exhibit 2 in your response to this question.
When the actual output exceeds the long-run potential of the economy, how will the self-correcting mechanism direct the economy to long-run equilibrium?
Explain why the unemployment rate will probably increase if the actual rate of inflation next year is only 3 percent.
What is the difference between an anticipated and an unanticipated increase in aggregate demand? Provide an example of each.
How the self-correcting mechanism will direct output toward the economy's long-run potential. Can you think of any reason that this mechanism might not work?
How would changes in conditions that move the production possibilities curve affect the SRAS and LRAS?
When the price of a specific product increases, individual firms can generally expand their output by a larger amount. Can you explain this apparent paradox?
What will the market price of the bond be when the long-term interest rate is 10 percent? What would it be if the interest rate were 5 percent?
How will an increase in the inflation rate affect (a) the money rate of interest and (b) the real rate of interest? Explain.
Explain why it's possible to temporarily achieve output levels beyond the economy's long-run potential. Why can't the high rates of output be sustained?
What will happen to the real wages of the union members if the price level is constant (unchanged) during the next three years?
Suppose that the consumer price index at year-end 2003 was 150 and by year-end 2004 had risen to 160. What was the inflation rate during 2004?
How would contributions to political campaigns be affected? Do you think politicians are very interested in curtailing the power of special interests?
Why aren't the quotas abolished? Has government action in this area improved the living standards of Americans? Why or why not?
Why are these things excluded? Is GDP a sexist measure? Does it understate the productive contributions of women relative to men? Discuss.
Which would be better to use if you want to measure whether your hourly earnings this year were higher than they were last year? Why?
What are price indexes designed to measure? Outline how they are constructed. When GDP and other income figures are compared across time periods.
What were the real earnings of private nonagricultural production workers in 2003 measured in 1982 dollars?
What impact will high and variable rates of inflation have on the economy? How will they influence risk accompanying long-term contracts and related business?
Does this mean that there were no jobs available? Does it mean that there were no jobs available for which the unemployed workers were qualified?
Is the natural rate of unemployment fixed? Why or why not? How are full employment and the natural rate of unemployment related?
List the major phases of the business cycle and indicate how real GDP, employment, and unemployment change during these phases.
How would your study habits be influenced if everyone in the class were going to be given an A grade?
Which of the two groups will participate more in the workforce? Which of the two groups will bear a larger number of children on average?