Chapter 11. a.True. b.True. c.False.d.True. e.False.f.False.a. 1960-98 1997-9US 3.1% 3.8%EU 3.1% 2.5%Japa n 5.8% -1.0While the US growth rate higher than its long-run average over the period, the growth rate hasslowed relative to long-run averages in both the EU and Japan over the last few years.b. Sometimes the economy is grow ing quickly, other times it is grow ing slowly or eve n con tract ing. The last few years of rapid growth in the US do not imply that the long-run average rate of growth has in creased back to its pre-1974 level.3. a. The data in the web page are: Real Gross Domestic Product, Real Final Sales of Domestic Product, and Real Gross National Product, Quarterly, 1959-96[Percent change from precedi ng quarter]Gross Final sales Grossdomestic of domestic n ationaproduct product product1959: I 8.6II 11.2III -0.3IV 1.71996: I 1.8II 6.0III 1.0IV 4.3 4.5 4. 9suggesting that recessi ons typically last two-three quarters and that the most severe recessi ons in that period were the recessi ons of 1974-75 and 1981-82.b. Perce ntage Chan gesin: Output GrowthIn flati on1968: 4.7I 7.5II 7.1III 3.0IV 1.81969: 3.0I 6.2II 1.0III 2.3IV -2.01970: 0.1I -0.7II 0.6III 3.7IV -3.91971: 3.3I 11.3II 2.3 4.III 2.6 4.IV 1.1 4.3If history simply repeats itself, the Un ited States might have a short recessi on (last ing perhaps oneyear) accompa nied by an accelerati on in the rate of in flati on by about one perce ntage poi nt.4. a. Banking services, bus in ess services.b. Not only has the relative dema nd for skilled workers in creased but the industries where this effect is the stron gest are maki ng up a greater fracti on of the economy.5. 1. Low un employme nt might lead to an in crease in in flati on.2. Although measureme nt error certa in ly con tributes to the measured slowdow nin growth, there are other issues to con sider as well, i ncludi ng the productivity of new research and accumulati on of new capital.3. Although labor market rigidities may be important, it is also important toconsider that these rigidities may not be excessive, and that high un employme nt may arise from flawed macroec ono mic policies.4. Although there were serious problems with regard to the management of Asian financial systems, it is important to consider the possibility that the flight of foreign capital from these coun tries worse ned the situati on by caus ing a severe stock market crash and excha nge rate depreciati on.5. Although the Euro will remove obstacles to free trade between Europeancountries, each country will be forced to give up its own monetary policy.* 6. a. From Chapter 1: US output 1997=$8b; China output 1996=$.84b. Note that China ' outputin 1997 is $(.84)*(1.09) b. Equating output for some time t in the future:8*(1.03)1(.84*1.09)*(1.09)匕/(.84*1.09)=(1.09/1.03) t 8.737=(1.058) t t =l n(8.737)/l n(1.058) ：：38yrsb. From Chapter 1: US output/worker in 1997=$29,800; China output/per worker in1996=$70029.8*(1.03) t=(.7*1.09)*(1.09) tVd65 yearsChapter 21. a. False.b. Un certa in: real or nominalGDP. c. True.d. True.e. False. The level of the CPI means nothing. Its rate of cha nge tells us about in flation.f. Un certa in. Which in dex is better depe nds on what we are trying tomeasure ——in flati on facedby con sumers or by the economy as a whole.2. a. +$100; Perso nal Co nsumptionExpe nditures b.no cha nge:i ntermediategoodc. +$200 million; GrossPrivateDomesticFixed In vestme nt d. +$200 milli on;Net Exportse. no change: the jet was already counted when it was produced, i.e., presumablywhen Delta(or some other airline) bought it new as an investment.*3. a. Measured GDP in creases by $10+$12=$22.b. True GDP should in crease by much less tha n $22 because by worki ng for anextra hour,you are no Ion ger produci ng the work of cook ing with in the house. Since cook ing within the house is a final service, it should count as part of GDP. Unfortunately, it is hard to measure the value of work within the home, which is why measured GDP does not in clude it.4. a. $1,000,000 the value of the silver necklaces.b. 1stStage:$300,000.2ndStage:$1,000,00-$300,000=$700,000.GDP: $300,000+$700,000=$1,000,000.c. Wages: $200,000 + $250,000=$450,000.Profits: ($300,000-$200,000)+($1,000,000-$250,000-300,000)=$100,000+$450,000=$550,000.GDP:$450,000+$550,000=$1,000,000.5. a. 1998 GDP: 10*$2,000+4*$1,000+1000*$ 1= $25,0001999 GDP: 12*$3,000+6*$500+1000*$1=$40,000Nomi nal GDP has in creased by 60%.b. 1998 real (1998) GDP: $25,0001999 real (1998) GDP: 12*$2,000+6*$1,000+1000*$1=$31,000Real (1998) GDP has in creased by 24%.c. 1998 real (1999) GDP: 10*$3,000+4*$500+1,000*$ 仁$33,0001999 real (1999) GDP: $40,000.Real (1999) GDP has in creased by 21.2%.d. True.6. a. 1998 base year:Deflator(1998)=1; Deflator(1999)=$40,000/$31,000=1.29In flatio n=29%b. 1999 base year:Deflator(1998)=$25,000/$33,000=0.76; Deflator(1999)=1In flatio c. Yes7. a. 1998 real GDP = 10*$2,500 + 4*$750 + 1000*$1 =$29,0001999 real GDP = 12*$2,500 + 6*$750 + 1000*$1$35,500-可编辑修改-b. (35,500-29,000)/29,000 = .224 = 22.4%c. Deflator in 1998=$25,000/$29,000=.86Deflator in 1999=$40,000/$35,500=1.13In flation = (1.13 -.86)/.86 = .314 = 31.4%.8. a. The quality of a routine checkup improves over time. Checkups now mayin clude EKGs, for example. Medical services are particularly affected by thisproblem due to con sta nt improveme nts in medical tech no logy.b. You n eed to know how the market values preg nancy checkups with andwithout ultra-so unds in that year.c. This in formatio n is not available since all doctors adopted the new tech no logysimulta neously. Still, you can tell that the quality adjusted in crease will be lower than 20%.*9. a. approximately 2.5% b. 1992 real GDP growth: 2.7%;un employme nt rate Jan 92: 7.3%; un employme nt rate Jan 93: 7.3%Supports Okun's law because the un employme nt rate does not cha nge whe n the growth rate of real GDP is n ear 2.5% c. -2 perce ntage poi nts cha nge in theunemployment rate; 5 percent GDP growth d. The growth rate of GDP must in crease by 2.5 perce ntage poin ts.Chapter 31. a. True.b. False. Government spending was 18% if GDP without transfers.c. False. The propensity to consume must be less than one for our model to bewell defi ned.d. True.false.e. False. The in crease in output is one times the multiplier.2. a. Y=160+0.6*(Y-100)+150+150 0.4Y=460-60 Y=1000b. Y D=Y-T=1000-100=900c. C=160+0.6*(900)=7003. a. No. The goods market is not in equilibrium.From part 2a, Dema nd=1000=C+l+G=700+150+150b. Yes. The goods market is in equilibrium.c. No. Private saving=Y-C-T=200. Public saving =T-G=-50. National saving(or in short, sav ing) equals private plus public sav ing, or 150. Nati onal sav ing equals inv estme nt.4. a. Roughly con siste nt. C/Y=700/1000=70%; l/Y=G/Y=150/1000=15%.b. Approximately -2%.c. Y needs to fall by 2%, or from 1000 to 980. The parameter c 0 needs to fall by20/multiplier,or by 20*(.4)=8. So C0 needs to fall from 160 to 152.d. The change in c 0 (-8) is less than the change in GDP (-20) due to the multiplier.5. a. Y in creases by 1/(1-c 1) b. Y decreases by c i/(1- c i)c. The an swers differ because spe nding affects dema nd directly, but taxes affectdema nd through con sumpti on, and the prope nsity to con sume is less tha n one.d. The cha nge in Y equals 1/(1-c 1) - c”(1- C1)= 1. Bala need budget cha nges inG and T are not macroec ono mically n eutral.e. The prope nsity to con sume has no effect because the bala need budget taxin crease abortsthe multiplier process. Y and T both in crease by on un it, so disposable in come, and hence con sumpti on, do not cha nge.*6. a. The tax rateilesstha non e.b.Y=C0+C1Y D+I+G impliesY=[1/(1-c 1+C1t1)]*[C0-C1t0+l+G]c. The multiplier = 1/(1-c 1+C1t1)<1/(1- c 1), so the economy responds less tocha nges in aut onom ous spe nding whe n t 1 is positive.d. Because of the automatic effect of taxes on the economy, the economy responds less to cha nges in aut onom ous spe nding tha n in the case where taxes are in depe ndent of in come. So output tends to vary less, and fiscal policy is called an automatic stabilizer.*7. a. Y=[1/(1-c 什C1t1)]*[C0-C1t0+l+G] b. T = C1t0 + t1*[1/(1-c 1+C1t1)]*[C0-C1t0+l+G] c. Both Y and T decrease. d. If G is cut, Y decreases eve n more.Chapter 41.a.Tru。
