Economy in the LONG RUN
|
|
- Daniel Hopkins
- 5 years ago
- Views:
Transcription
1 Economy in the LONG RUN I. The Aggregate Production Function II. Classical Growth Model (not in textbook) III. Neo-classical Growth Model - without long term growth - with population and technology growth IV. Policies
2 II. Classical Growth Theory (Malthusian theory) The theory that the clash between an exploding population and limited resources will eventually bring economic growth to an end. Population (West Europe & China)
3 II. Classical Growth Theory (Malthusian theory) The theory that the clash between an exploding population and limited resources will eventually bring economic growth to an end. GDP per Capita (West Europe & China) 1,
4 II. Classical Growth Theory (Malthusian theory) The theory that the clash between an exploding population and limited resources will eventually bring economic growth to an end. GDP per Capita growth (West Europe & China) 1.00% % 0.00% -0.50% -1.00%
5 Thomas Robert Malthus ( ) An Essay on the Principle of Population (1798), Malthus observed that an increase in a nation's food production improved the well-being of the populace, but the improvement was temporary because it led to population growth, which in turn restored the original per capita production level. Malthusian trap = Mankind had a propensity to utilize abundance for population growth rather than for maintaining a high standard of living.
6 When the classical economists were developing their ideas about population growth, (1) land was seen as the crucial capital needed for production; (2) all surface of Earth was discovered ; (3) an unprecedented population explosion was under way.
7 When the classical economists were developing their ideas about population growth, (1) land was seen as the crucial capital needed for production; (2) all surface of Earth was discovered ; (3) an unprecedented population explosion was under way. To explain the high rate of population growth, the classical economists used the idea of a subsistence real income ( y s, real GDP per capita). In classical theory, when real income (per capita) exceeds the subsistence real income, the population grows. No matter how much technological change occurs, real income is always pushed back toward the subsistence level. (This dismal implication led to economics being called the dismal science.) Experiment: Suppose capital increase & technological advance happens
8 1. The economy starts at point A on production function curve F 0 with real GDP at the subsistence level and constant population. Real GDP per Capita Capital per capita decreases GDP per capita decreases Population Increases F 0 (K/N,1) Population Decreases 0 Capital per Capita
9 1. The economy starts at point A on production function curve F 0 with real GDP at the subsistence level and constant population. 2. As capital per capita increases, real GDP per capita rises above the subsistence level the economy moves to point B. Real GDP per Capita 3. As technological advance (and human capital accumulate) increase productivity, the production curve shifts upward to F 1 the economy moves to C. 4. With real GDP above the subsistence level, the population grows and capital per capita decreases downward along F At point D, the economy is back at the subsistence level of real GDP per capita. Point D is the new STEADY STATE F 1 (K/N,1) F 0 (K/N,1) 0 Capital per Capita
10 Interactions Between Output and Capital Classical Growth Model Malthus (1798) Population The amount of capital determines the amount of output being produced. The amount of output determines the size of population. The change in population determines the change of capital (= land in 1798) stock per capita.
11 Interactions Between Output and Capital Classical Growth Model Malthus (1798) Population The amount of capital determines the amount of output being produced. The amount of output determines the size of population. The change in population determines the change of capital (= land in 1798) stock per capita. (i) CLASSICAL GROWTH MODEL Suppose that Y t = N t K t and N t+1 = N t * [1+(Y t /N t y s )/y s ] where y s is the subsistence level of income. Assume that K t = K = 81 for all t N 0 = 49 and y s = 1 Determine the output per capita in period 0. Y 0 /N 0 = 63 / 49 = 9 / 7 = Determine the population in period 1. N 1 =49 * [1+( )/1] = 63 Determine the output per capita in period 1. Y 1 /N 1 = /63 = Determine the population in period 2. N 2 =63 * [1+( )/1] = Determine the output per capita in period 2. Y 2 /N 2 =76.067/ = 1.065
12 (i) CLASSICAL GROWTH MODEL Suppose that Y t = N t K t and N t+1 = N t * [1+(Y t /N t y s )/y s ] where y s is the subsistence level of income. Assume that K t = K = 81 for all t N 0 = 49 and y s = 1 Determine the output per capita in period 0. Y 0 /N 0 = 63 / 49 = 9 / 7 = Determine the population in period 1. N 1 =49 * [1+( )/1] = 63 Determine the output per capita in period 1. Y 1 /N 1 = /63 = Determine the population in period 2. N 2 =63 * [1+( )/1] = Determine the output per capita in period 2. Y 2 /N 2 =76.067/ = CLASICAL GROWTH MODEL STEADY STATE Suppose that Y t = N t K t and N t+1 = N t * [1+(Y t /N t y s )/y s ] where Y*/N*= y y s is s the subsistence level of income. Assume that K t = 81 for all t N 0 = N = 49 and y s = 1 Determine the steady state level of output per capita. Y*/N* = y s = 1 Determine the steady state population. N*=? : Y*/N* = 1 Y* = N* 81 Y* = N* = N* 81 N* = 81 f(k/n)
Economic Growth C H A P T E R C H E C K L I S T. When you have completed your study of this chapter, you will be able to
Economic Growth CHAPTER25 C H A P T E R C H E C K L I S T When you have completed your study of this chapter, you will be able to 1 Define and calculate the economic growth rate, and explain the implications
More informationMacroeconomics (Code: E214) - Lecturer: Dr. Amira Akl Ahmed. Faculty of Commerce Department of Economics English Section Academic year 2013/2014
Faculty of Commerce Department of Economics English Section Academic year 2013/2014 Questions for Chapter 6 of Macroeconomics, 10e (Parkin) First: Multiple choice questions The Basics of Economic Growth
More informationLong-Run Economic Growth
Economic Growth Long-Run Economic Growth A. It is the long-run upward trend in the economy. (i.e., growth in potential GDP) B. Small differences in growth rates have large long-run effects. 1. Ex. Suppose
More informationMidsummer Examinations 2012
Midsummer Examinations 2012 No. of Pages: 6 No. of Questions: 34 Subject ECONOMICS Title of Paper MACROECONOMICS Time Allowed Two Hours (2 Hours) Instructions to candidates This paper is in two sections.
More informationVI. LONG-RUN ECONOMIC GROWTH
VI. LONG-RUN ECONOMIC GROWTH A. Employment and Production 1. Employment and unemployment a. The unemployment rate is defined as the ratio of unemployed workers (those seeking employment) to the labor force.
More informationCHAPTER 11. SAVING, CAPITAL ACCUMULATION, AND OUTPUT
CHAPTER 11. SAVING, CAPITAL ACCUMULATION, AND OUTPUT I. MOTIVATING QUESTION Does the Saving Rate Affect Growth? In the long run, saving does not affect growth, but does affect the level of per capita output.
More informationECONOMIC GROWTH. Objectives. Transforming People s Lives. Transforming People s Lives. Transforming People s Lives CHAPTER
ECONOMIC 30 GROWTH CHAPTER Objectives After studying this chapter, you will able to Describe the long-term growth trends in Canada and other countries and regions Identify the main sources of long-term
More informationThe Basics of Economic Growth. Real GDP per person in Canada tripled in the 50 years between 1958 and 2008.
Real GDP per person in Canada tripled in the 50 years between 1958 and 2008. What has brought about this growth in production, incomes, and living standards? We see even greater economic growth in modern
More informationEconomic Growth: Malthus and Solow Copyright 2014 Pearson Education, Inc.
Chapter 7 Economic Growth: Malthus and Solow Copyright Chapter 7 Topics Economic growth facts Malthusian model of economic growth Solow growth model Growth accounting 1-2 U.S. Per Capita Real Income Growth
More informationUNIVERSITY OF TORONTO Faculty of Arts and Science. August Examination 2013 ECO 209Y. Duration: 2 hours
UNIVERSITY OF TORONTO Faculty of Arts and Science August Examination 2013 ECO 209Y Duration: 2 hours Examination Aids allowed: Non-programmable calculators only LAST NAME FIRST NAME STUDENT NUMBER DO NOT
More information6. The Aggregate Demand and Supply Model
6. The Aggregate Demand and Supply Model 1 Aggregate Demand and Supply Curves The Aggregate Demand Curve It shows the relationship between the inflation rate and the level of aggregate output when the
More informationECON 3312 Macroeconomics Exam 2 Spring 2017 Prof. Crowder
ECON 3312 Macroeconomics Exam 2 Spring 2017 Prof. Crowder Name MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Suppose the economy is currently
More informationMULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
ECON 3312 Mcroeconomics Exam 2 Fall 2016 Prof. Crowder Name MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) If output is currently 1000 below full
More informationChapter 9 Chapter 10
Assignment 4 Last Name First Name Chapter 9 Chapter 10 1 a b c d 1 a b c d 2 a b c d 2 a b c d 3 a b c d 3 a b c d 4 a b c d 4 a b c d 5 a b c d 5 a b c d 6 a b c d 6 a b c d 7 a b c d 7 a b c d 8 a b
More informationEconomic Growth: Malthus and Solow
Economic Growth: Malthus and Solow Economics 4353 - Intermediate Macroeconomics Aaron Hedlund University of Missouri Fall 2015 Econ 4353 (University of Missouri) Malthus and Solow Fall 2015 1 / 35 Introduction
More informationFETP/MPP8/Macroeconomics/Riedel. General Equilibrium in the Short Run II The IS-LM model
FETP/MPP8/Macroeconomics/iedel General Equilibrium in the Short un II The -LM model The -LM Model Like the AA-DD model, the -LM model is a general equilibrium model, which derives the conditions for simultaneous
More informationIntroduction to economic growth (1)
Introduction to economic growth (1) EKN 325 Manoel Bittencourt University of Pretoria M Bittencourt (University of Pretoria) EKN 325 1 / 32 Introduction In the last century the USA has experienced a tenfold
More informationECONOMIC GROWTH CHAPTER
ECONOMIC GROWTH 17 CHAPTER The Basics of Economic Growth U.S. real GDP per person and the standard of living tripled between 1960 and 2010. We see even more dramatic change in China, where incomes have
More informationTest 2 Economics 322 Chappell March 22, 2007
Test 2 Economics 322 Chappell March 22, 2007 Name Last 4 Digits This test has two parts. There are 20 multiple choice questions at 3 points each (60 points total). There are three analytical questions,
More informationINTERMEDIATE MACROECONOMICS
INTERMEDIATE MACROECONOMICS LECTURE 4 Douglas Hanley, University of Pittsburgh ECONOMIC GROWTH IN THIS LECTURE Why do countries grow economically? Why do some countries grow faster than others? Why has
More informationECON MACROECONOMIC PRINCIPLES Instructor: Dr. Juergen Jung Towson University. J.Jung Chapter 8 - Economic Growth Towson University 1 / 64
ECON 202 - MACROECONOMIC PRINCIPLES Instructor: Dr. Juergen Jung Towson University J.Jung Chapter 8 - Economic Growth Towson University 1 / 64 Disclaimer These lecture notes are customized for the Macroeconomics
More informationWeek Twelve. Linus Yamane. Time Inconsistency of Optimal Policy
Week Twelve Linus Yamane Time Inconsistency of Optimal Policy A government s preferences at one point in time can be inconsistent with its preferences at a later point in time. People understand the government
More informationReview. Question 1. Answer 1. Question 2. Answer 2. Question 3. Exam Review (Questions Beyond Test 1) True or False? True or False?
Question 1 Review Exam Review (Questions Beyond Test 1) An increase in income causes the IS curve to shift to the right. Answer 1 When income changes we move along the IS curve. Income itself is not an
More informationMultiple Choice Questions (3 points each) Please answer the questions on the green scantron.
ECON 203-200, Fall 2006 EXAM #2 Multiple Choice Questions (3 points each) Please answer the questions on the green scantron. 1) If the short run aggregate supply curve is vertical, a decrease in money
More informationQUESTIONNAIRE B I. MULTIPLE CHOICE QUESTIONS (4 points each)
ECO2143 Macroeconomic Theory II Final examination: April 25, 2007 University of Ottawa Professor: Louis Hotte Time allowed: 3h00min Attention: Not all questionnaires are the same. This is questionnaire
More informationProblem Set 2: Answer Key
ECO 5360 - Economic Development: Macro Persp. Thomas Osang Problem Set 2: Answer Key Part I: 1. Steady-State solutions for k and y : k = ( sa n ) 1 1 a y = A How to derive the above results: 1 1 a First,
More informationMACROECONOMICS. Economic Growth I: Capital Accumulation and Population Growth MANKIW. In this chapter, you will learn. Why growth matters
C H A P T E R 7 Economic Growth I: Capital Accumulation Population Growth MACROECONOMICS N. GREGORY MANKIW 2007 Worth Publishers, all rights reserved SIXTH EDITION PowerPoint Slides by Ron Cronovich In
More information9. CHAPTER: Aggregate Demand I
TOBB-ETU, Economics Department Macroeconomics I (IKT 233) Ozan Eksi Practice Questions with Answers (for Final) 9. CHAPTER: Aggregate Demand I 1-) In the long run, the level of output is determined by
More informationEC202 Macroeconomics
EC202 Macroeconomics Koç University, Summer 2014 by Arhan Ertan Study Questions - 3 1. Suppose a government is able to permanently reduce its budget deficit. Use the Solow growth model of Chapter 9 to
More informationVelocity of Money and the Equation of Exchange
Velocity of Money and the Equation of Exchange Velocity of Money the rate at which the dollar travels around the economy from consumer to consumer. measures the economic activity of a nation V = P x Y
More informationFinal Exam - Economics 101 (Fall 2009) You will have 120 minutes to complete this exam. There are 105 points and 7 pages
Name Student ID Section day and time Final Exam - Economics 101 (Fall 2009) You will have 120 minutes to complete this exam. There are 105 points and 7 pages Multiple Choice: (20 points total, 2 points
More information4. What two variables are always equal for a profit maximizing firm? Ans: Marginal revenue and marginal cost
SET 1 1. What bubble in the late 1990 s to early 2000 s significantly increased productivity growth in the US? Ans: Dot-com bubble, technology bubble 2. What is a market with only a single buyer called?
More informationEC and MIDTERM EXAM I. March 26, 2015
EC102.03 and 102.05 Spring 2015 Instructions: MIDTERM EXAM I March 26, 2015 NAME: ID #: You have 80 minutes to complete the exam. There will be no extensions. The exam consists of 40 multiple choice questions.
More informationHomework Assignment #6. Due Tuesday, 11/28/06. Multiple Choice Questions:
Homework Assignment #6. Due Tuesday, 11/28/06 Multiple Choice Questions: 1. When the inflation rate is expected to be zero, Steve plans to lend money if the interest rate is at least 4 percent a year and
More informationEastern Mediterranean University Department of Economics Spring Semester Econ 102 Midterm Exam. Duration: 90 minutes
Eastern Mediterranean University Department of Economics 2016-2017 Spring Semester Econ 102 Midterm Exam EXAM BOOKLET: A 13th April 2017 Name: Student No: Group: Duration: 90 minutes Part I: Multiple Choice
More informationEric Zivot Economics 301 Department of Economics Winter, 1997 University of Washington. Final Exam
Eric Zivot Economics 301 Department of Economics Winter, 1997 University of Washington General Instructions: Final Exam This exam is closed book and closed notes. The time limit is 120 minutes. Please
More informationDeviations from full employment in a closed economy Short-run equilibrium Monetary and fiscal policy
Kevin Clinton Winter 2005 Deviations from full employment in a closed economy Short-run equilibrium Monetary and fiscal policy Some key features we can ignore in the long run are crucial in the short run:
More informationSolow instead assumed a standard neo-classical production function with diminishing marginal product for both labor and capital.
Module 5 Lecture 34 Topics 5.2 Growth Theory II 5.2.1 Solow Model 5.2 Growth Theory II 5.2.1 Solow Model Robert Solow was quick to recognize that the instability inherent in the Harrod- Domar model is
More informationGrowth and Ideas. Chad Jones Stanford GSB. October 14, Growth and Ideas p. 1
Growth and Ideas Chad Jones Stanford GSB October 14, 2015 Growth and Ideas p. 1 U.S. GDP per Person Growth and Ideas p. 2 Why? The average American is 15 times richer today than in 1870. How do we understand
More informationECON 6022B Problem Set 1 Suggested Solutions Fall 2011
ECON 6022B Problem Set Suggested Solutions Fall 20 September 5, 20 Shocking the Solow Model Consider the basic Solow model in Lecture 2. Suppose the economy stays at its steady state in Period 0 and there
More informationME II, Prof. Dr. T. Wollmershäuser. Chapter 12 Saving, Capital Accumulation, and Output
ME II, Prof. Dr. T. Wollmershäuser Chapter 12 Saving, Capital Accumulation, and Output Version: 23.06.2010 Saving, Capital Accumulation, and Output The effects of the saving rate the ratio of saving to
More informationProblem Set #2. Intermediate Macroeconomics 101 Due 20/8/12
Problem Set #2 Intermediate Macroeconomics 101 Due 20/8/12 Question 1. (Ch3. Q9) The paradox of saving revisited You should be able to complete this question without doing any algebra, although you may
More informationThe Influence of Monetary and Fiscal Policy on Aggregate Demand
Chapter 32 The Influence of Monetary and Fiscal Policy on Aggregate Demand Test B 1. Of the effects that help explain why the U.S. aggregate demand curve slopes downward the a. wealth effect is most important
More informationPrinciples of Macroeconomics December 17th, 2005 name: Final Exam (100 points)
EC132.02 Serge Kasyanenko Principles of Macroeconomics December 17th, 2005 name: Final Exam (100 points) This is a closed-book exam - you may not use your notes and textbooks. Calculators are not allowed.
More informationChapter 8 Economic Growth I: Capital Accumulation and Population Growth
Chapter 8 Economic Growth I: Capital Accumulation and Population Growth Modified by Yun Wang Eco 3203 Intermediate Macroeconomics Florida International University Summer 2017 2016 Worth Publishers, all
More informationMacroeconomics I Exam Revision. Part A: Week Four Economic Growth Based on Week Three Lectures [Also refer to Chapter 20]
Macroeconomics I Exam Revision Part A: Week Four Economic Growth Based on Week Three Lectures [Also refer to Chapter 20] Section 1: Lecture One 1. What is the difference between nominal GDP and real GDP?
More informationMidsummer Examinations 2013
Midsummer Examinations 2013 No. of Pages: 7 No. of Questions: 34 Subject ECONOMICS Title of Paper MACROECONOMICS Time Allowed Two Hours (2 Hours) Instructions to candidates This paper is in two sections.
More informationTOPIC 4 Economi G c rowth
TOPIC 4 Economic Growth Growth Accounting Growth Accounting Equation Y = A F(K,N) (production function). GDP Growth Rate =!Y/Y Growth accounting equation:!y/y =!A/A +! K!K/K +! N!N/N Output, in a country
More informationTheories of Growth and Development Fall 2001, Midterm I
Theories of Growth and Development Fall 2001, Midterm I Prof Erinç Yeldan YOU HAVE 3 HOURS FOR THIS EXAM. THUS TIME IS AN EXTREMELY SCARCE GOOD. USE IT OPTIMALLY 1) (5 points) Discuss analytically as an
More informationCHAPTER 15 Long-Run Macroeconomic Adjustments
PART 5: THE LONG RUN AND CURRENT ISSUES IN MACRO THEORY AND POLICY CHAPTER 15 Long-Run Macroeconomic Adjustments Slides prepared by Bruno Fullone, George Brown College 2010 McGraw-Hill Ryerson Limited
More informationChapter 6 ECONOMIC GROWTH. Usual measure. Economic Growth. In this chapter-
Chapter 6 ECONOMIC GROWTH In this chapter- Define and calculate the growth rate and explain the implications of sustained growth in economic activity Briefly describe the economic growth trends in the
More informationEconomic Growth. (c) Copyright 1999 by Douglas H. Joines 1. Module Objectives
Economic Growth Module Objectives now what determines the growth rates of aggregate and per capita GDP Distinguish factors that affect the economy s growth rate from those that merely shift the level of
More informationArchimedean Upper Conservatory Economics, November 2016 Quiz, Unit VI, Stabilization Policies
Multiple Choice Identify the choice that best completes the statement or answers the question. 1. The federal budget tends to move toward _ as the economy. A. deficit; contracts B. deficit; expands C.
More informationUNIVERSITY OF MIAMI Principles of Macroeconomics (ECO 212) Answer key to Multiple choice problems of Midterm 1 Fall 2007 Professor Adrian Peralta-Alva
UNIVERSITY OF MIAMI Principles of Macroeconomics (ECO 212) Answer key to Multiple choice problems of Midterm 1 Fall 2007 Professor Adrian Peralta-Alva Section I. Multiple-choice questions (70 points total,
More informationChapter 23. The Keynesian Framework. Learning Objectives. Learning Objectives (Cont.)
Chapter 23 The Keynesian Framework Learning Objectives See the differences among saving, investment, desired saving, and desired investment and explain how these differences can generate short run fluctuations
More informationEconomic 100B Macroeconomic Analysis Professor Steven Wood. Exam #1 ANSWERS
Name: SID: Discussion Section: GSI: Economic 100B Macroeconomic Analysis Professor Steven Wood Fall 2008 Exam #1 ANSWERS Please sign the following oath: The answers on this test are entirely my own work.
More informationEQ: What are the Assumptions of Keynesian Economic Theory?
EQ: How is Keynesian Theory Different from Classical Theory? Classical Theory Supply-Focused (SRAS) Say s Law Economy is self-regulating Laissez-Faire Wages can go up or down Businesses will borrow & invest
More informationDisposable income (in billions)
Section 4 version 2 Multiple Choice Identify the choice that best completes the statement or answers the question. 1. An increase in the MPC: A. increases the multiplier. B. shifts the autonomous investment
More information2. In terms of dollar volume of exports and imports, the most important trading partner for the United States is:
1. In the U.S. economy, all are generally accepted economic functions of government except: A) The provision of public goods B) The production and distribution of consumer goods C) Pursuing policies that
More informationAP Econ Practice Test Unit 5
DO NOT WRITE ON THIS TEST! AP Econ Practice Test Unit 5 Multiple Choice Identify the choice that best completes the statement or answers the question. 1. The marginal propensity to consume is equal to:
More informationECON 3560/5040 Week 8-9
ECON 3560/5040 Week 8-9 AGGREGATE DEMAND 1. Keynes s Theory - John Maynard Keynes (1936) criticized classical theory for assuming that AS alone capital, labor, and technology determines national income
More informationLab #7. Chapter 7 Growth, Productivity, and Wealth in the Long Run
University of Lethbridge - Department of Economics ECON 1012 Introduction to Macroeconomics LAB Instructor: Michael G. Lanyi Lab #7 Chapter 7 Growth, Productivity, and Wealth in the Long Run Answer Sheet
More informationFiscal and Monetary Policy in the Growth Model. Introduction
Introduction Fiscal and Monetary Policy in the Growth Model A. Our focus will be on fiscal and monetary policies over a longtime horizon. (ex. 10 years) B. Ex. The federal budget deficit was much higher
More informationE-322 Muhammad Rahman CHAPTER-6
CHAPTER-6 A. OBJECTIVE OF THIS CHAPTER In this chapter we will do the following: Look at some stylized facts about economic growth in the World. Look at two Macroeconomic models of exogenous economic growth
More information2. In the short-run international macroeconomic theory developed in the textbook, the AA curve shows
HOMEWORK 9 (CHAPTER 17 OUTPUT AND THE EXCHANGE RATE IN THE SHORT RUN) ECO41 FALL 2015 UDAYAN ROY Each correct answer is worth 1 point. The maximum score is 20 points. This homework is due in class on Monday,
More informationIntroduction. Learning Objectives. Chapter 11. Classical and Keynesian Macro Analyses
Chapter 11 Classical and Keynesian Macro Analyses Introduction The same basic pattern has repeated four times in recent U.S. history: 1973-1974, 1979-1980, 1990, and 2001. First, world oil prices jump.
More informationMacroeconomics: Principles, Applications, and Tools
Macroeconomics: Principles, Applications, and Tools NINTH EDITION Chapter 16 The Dynamics of Inflation and Unemployment Learning Objectives 16.1 Describe how an economy at full unemployment with inflation
More informationECON 1010 Principles of Macroeconomics Exam #2. Section A: Multiple Choice Questions. (30 points; 2 pts each)
ECON 1010 Principles of Macroeconomics Exam #2 Section A: Multiple Choice Questions. (30 points; 2 pts each) #1. If the price level in the economy and the nominal wages both doubled, then real wages would
More informationObjectives THE BUSINESS CYCLE CHAPTER
14 THE BUSINESS CYCLE CHAPTER Objectives After studying this chapter, you will able to Distinguish among the different theories of the business cycle Explain the Keynesian and monetarist theories of the
More informationIntermediate Macroeconomics
Intermediate Macroeconomics Lecture 5 - Endogenous growth models Zsófia L. Bárány Sciences Po 2014 February Recap: Why go beyond the Solow model? we looked at the Solow model with technological progress
More informationMIDTERM EXAMINATION #2 Instructions: To insure fairness in grading, please write only your student ID number on the top of each page of your exam.
Principles of Macroeconomics University of Alaska, Anchorage Lance Howe ID #: November 8, 003 MIDTERM EXAMINATION # Instructions: To insure fairness in grading, please write only your student ID number
More informationFEEDBACK TUTORIAL LETTER
FEEDBACK TUTORIAL LETTER 2 nd SEMESTER 2017 ASSIGNMENT 1 INTERMEDIATE MACRO ECONOMICS IMA612S 1 FEEDBACK TUTORIAL LETTER ASSIGNMENT 1 SECTION A [20 marks] QUESTION 1 [20 marks, 2 marks each] Correct answer
More informationPre-Test Chapter 9 ed17
Pre-Test Chapter 9 ed17 Multiple Choice Questions 1. Which of the following statements is incorrect? A. Given the economy's MPS, a $15 billion reduction in government spending will reduce the equilibrium
More informationChapter 4. Economic Growth
Chapter 4 Economic Growth When you have completed your study of this chapter, you will be able to 1. Understand what are the determinants of economic growth. 2. Understand the Neoclassical Solow growth
More informationReview: objectives. CHAPTER 2 The Data of Macroeconomics slide 0
Review: objectives Remind you of the main theories. Overview of how parts of the course all fit together. Draw the most important and general lessons to remember from the course. CHAPTER 2 The Data of
More informationIntroduction to Economic Fluctuations
Chapter 9 Introduction to Economic Fluctuations slide 0 In this chapter, you will learn facts about the business cycle how the short run differs from the long run an introduction to aggregate demand an
More informationIntermediate Macroeconomic Theory / Macroeconomic Analysis (ECON 3560/5040) Midterm Exam (Answers)
Intermediate Macroeconomic Theory / Macroeconomic Analysis (ECON 3560/5040) Midterm Exam (Answers) Part A (15 points) State whether you think each of the following questions is true (T), false (F), or
More informationShort-run and Long-run equilibria in the AD-AS model: Flexible Wages and Prices. 4Topic
Short-run and Long-run equilibria in the AD-AS model: Flexible Wages and Prices 4Topic The Classical View The term classical economics is often used to refer to an era in the history of economic thought
More informationEconomic Growth Models
Economic Growth Models Prof. Goldstein Economic Demography Econ/Demog c175 Week 3: Lecture A Spring 2018 UC Berkeley econ c175 1 Malthus (review) Technology Mini-Olympics Today s agenda Neo-classical growth
More informationECON2123 TUT: AS-AD NOTE
ECON2123 TUT: AS-AD NOTE This note is preliminary, and subject to further revision. ding.dong@connect.ust.hk 1 AS-AD: Introduction 1.1 Supply and Demand In every commodity good market, there will be supply
More informationFACULTY NAME: MANAGEMENT SCIENCE NAME OF DEPARTMENT: ACCOUNTING, ECONOMICS AND FINANCE. Intermediate Macro-Economics
FACULTY NAME: MANAGEMENT SCIENCE NAME OF DEPARTMENT: ACCOUNTING, ECONOMICS AND FINANCE COURSE NAME: COURSE CODE: Intermediate Macro-Economics IMA612S DATE: January 2016 MARKS: 100 DURATION: 3 Hours SECOND
More informationA dynamic approach to short run economic fluctuations. The DAD/DAS model. Part 3 The long run equilibrium & short run fluctuations.
A dynamic approach to short run economic fluctuations. The DAD/DAS model Part 3 The long run equilibrium & short run fluctuations. The DAD-DAS model s long-run equilibrium Recall the long-run equilibrium
More informationEconomics 102 Discussion Handout Week 14 Spring Aggregate Supply and Demand: Summary
Economics 102 Discussion Handout Week 14 Spring 2018 Aggregate Supply and Demand: Summary The Aggregate Demand Curve The aggregate demand curve (AD) shows the relationship between the aggregate price level
More informationPractice Test 1: Multiple Choice
Practice Test 1: Multiple Choice 1. If aggregate planned expenditure exceeds real GDP A. actual inventories decrease below their target. B. firms are not maximizing their profits. C. planned consumption
More informationECO 209Y MACROECONOMIC THEORY AND POLICY
Department of Economics Prof. Gustavo Indart University of Toronto March 14, 2007 ECO 209Y MACROECONOMIC THEORY AND POLICY SOLUTION Term Test #3 LAST NAME FIRST NAME STUDENT NUMBER Circle the section of
More informationKarl Marx and Market Failure
Unit 3 Karl Marx and Market Failure Krugman Module 74 pp. 723-726; Module 76 pp. 743-750; Module 77 pp.754-756; Module 78 pp. 761-770; Module 79 pp. 782-785 Modules 17-19 pp. 172 198 1 Greed is Good. -The
More informationForeign Trade and the Exchange Rate
Foreign Trade and the Exchange Rate Chapter 12 slide 0 Outline Foreign trade and aggregate demand The exchange rate The determinants of net exports A A model of the real exchange rates The IS curve and
More informationMacroeconomic Theory and Stabilization Policy. Multiple Choice Problems [Select the best alternative]
1 Macroeconomic Theory and Stabilization Policy Module 1: Introduction Multiple Choice Problems [Select the best alternative] 1. In stagflation potential output of the economy declines. the inflation rate
More informationEcon 102 Exam 2 Name ID Section Number
Econ 102 Exam 2 Name ID Section Number 1. In a closed economy government spending was $30 billion, consumption was $70 billion, taxes were $20 billion, and GDP was $110 billion this year. Investment spending
More informationComponents of Economic Growth
Components of Economic Growth Components of Economic Growth 1. Capital Accumulation: savings from present income invested to increase future output and income New factories, equipment, etc., increase the
More informationThis paper is not to be removed from the Examination Halls UNIVERSITY OF LONDON
~~EC2065 ZB d0 This paper is not to be removed from the Examination Halls UNIVERSITY OF LONDON EC2065 ZB BSc degrees and Diplomas for Graduates in Economics, Management, Finance and the Social Sciences,
More informationEcon 20B Spr 2008 Sample Final Exam
Econ 20B Spr 2008 Sample Final Exam Prof. Min Ouyang Please Do this sample final exam before looking at the answer key!!! Time limit: 120 minutes Instructions: 1) The exam is closed book. 2) Final exam
More informationEconomics Macroeconomic Theory. Spring Final Exam, Tuesday 6 May 2003
Economics 202.04 - Macroeconomic Theory Spring 2003 - Final Exam, Tuesday 6 May 2003 Please answer: ALL QUESTIONS IF YOU DO PART 1 3 OUT OF 4 QUESTIONS IF YOU DO PART 2 Each question in each part carries
More informationModel Question Paper Economics - II (MSF1A4)
Model Question Paper Economics - II (MSF1A4) Answer all 74 questions. Marks are indicated against each question. 1. Which of the following is true if the central bank of a country sells government securities
More informationFiscal Policy Chapter Don t always follow the advice of following your dreams because it s hard to get a job as a dragonfly.
Fiscal Policy Chapter 15.1 Don t always follow the advice of following your dreams because it s hard to get a job as a dragonfly. Budget: a list of all your income and a list of all of your expenses and
More informationChapter 9 The IS LM FE Model: A General Framework for Macroeconomic Analysis
Chapter 9 The IS LM FE Model: A General Framework for Macroeconomic Analysis The main goal of Chapter 8 was to describe business cycles by presenting the business cycle facts. This and the following three
More informationEconomic Growth Chapter 12 Section Main Menu
Economic Growth 12.3 How do economists measure economic growth? What is capital deepening? How are saving and investing related to economic growth? How does technological progress affect economic growth?
More informationEastern Mediterranean University Faculty of Business and Economics Department of Economics Spring Semester
Eastern Mediterranean University Faculty of Business and Economics Department of Economics 2015-16 Spring Semester Duration: 90 minutes ECON102 - Introduction to Economics II Final Exam Type A 2 June 2016
More informationAggregate Demand, Aggregate Supply, and the Self-Correcting Economy
Aggregate Demand, Aggregate Supply, and the Self-Correcting Economy The Role of Aggregate Demand & Supply Endogenizing the Price Level Inflation Deflation Price Stability The Aggregate Demand Curve Relates
More informationMidterm Examination Number 1 February 19, 1996
Economics 200 Macroeconomic Theory Midterm Examination Number 1 February 19, 1996 You have 1 hour to complete this exam. Answer any four questions you wish. 1. Suppose that an increase in consumer confidence
More information