《宏观经济学》(格伦·哈伯德,安东尼)课后答案2

Chapter 7

Answers to End-of-Chapter Problems and Applications

2. We would prefer working in an industry producing a normal good during an economic expansion, but an industry producing an inferior good during a recession. During an expansion, the increase in incomes would increase the demand for a normal good, which would increase the demand for jobs in the industry. The expansion, however, would decrease the demand for an inferior good and the jobs that produce them. During a recession, the decrease in incomes would decrease the demand for a normal good, which would decrease the demand for jobs in the industry, but would increase the demand an inferior good and the jobs that produce them.

4. b., c., and d. -- the purchase of the aircraft carrier by the federal government, the French wine by a U.S. consumer, and the new machine tool by Ford – represent purchases of final goods. The purchase of wheat from a wheat farmer by a bakery represents the purchase of an intermediate good.

6. The value of the house built in 2000 would not be included in GDP of 2006 because the sale does

not

represent new production. The value of the services of the real estate agent that helped sell or buy the house in 2006 would be included in GDP of 2006 because those services were newly provided in 2006.

8. a. Real GDP for 2006 = (100 x $50) + (100 x $2) + (50 x $30) = $6,700

Real GDP for 2007 = (100 x $50) + (120 x $2) + (65 x $30) = $7,190

b.

700

,6$700 ,6$

190

,7$?

x 100 = 7.3%

10. Value added subtracts only the cost of intermediate goods, but profits subtracts all costs – the costs of intermediate goods along with the costs of the so-called primary factors of production (labor, capital, natural resources, and entrepreneurship).

12. Value added of the artist = ($800 x 10) - $5,000 = $3,000

Value added of the local art store = ($1,000 x 10) – ($800 x 10) = $2,000

14. a. is likely to increase measured GDP, and c. is likely to reduce it. b. is also likely to increase measured GDP if it results in increased government expenditures on law enforcement and increased private expenditures on security. But an increase in the crime rate might indicate that the level of production in the underground economy is increasing, which should reduce measured GDP, not increase it.

16. “Informal economic activities” refer to the underground economy. These activities are concealed and will not be counted in GDP. They make the comparison of standard of living across countries harder, because economists often use real GDP per capita as a general measure of standard of living.

18. a. Nominal GDP is greater than real GDP.

b. Nominal GDP equals real GDP.

c. Nominal GDP is less than real GDP.

20.

Nominal GDP Real GDP GDP deflator

2000 $9,817 $9,817 100.0

2001 10,128 9,890 102.4

2002 10,470 10,049 104.2

2003 10,971 10,321 106.3

2004 11,734 10,756 109.1

Percentage increase in the price level for:

2001:

0.1000

.1004.102?x 100 = 2.4%

2002:

4

.1024

.1022.104?x 100 = 1.8%

2003:

2.1042

.1043.106?x 100 = 2.0%

2004: 3

.1063

.1061.109? x 100 = 2.6%

The largest percentage increase in the price level occurred in 2004.

Chapter 8

Answers to End-of-Chapter Problems and Applications

2. A recession or slowdown in the economy that decreases the demand for the company’s products would cause a firm to lay off workers. Technological innovations or international competition that decrease the number of workers required in the domestic industry or decreases the size of the domestic industry could lead to layoffs. The firm falling behind its competition in the industry due to inadequate management or product development would cause layoffs.

4. Including homemakers as employed would decrease the unemployment rate because it increases the size of the labor force, but leaves unchanged the number of unemployed. Including homemakers as employed would increase the labor force participation rate because it increases the labor force, but leaves unchanged the working-age population.

6. For someone frictionally unemployed the advice would be to keep searching. The person has the required skills; it is a information/search issue. For someone structurally unemployed the advice would center on the need to retrain or to find another occupation. For someone cyclically unemployed the advice would be to realize that the search will take longer because of the recession, and to consider taking a lower paying job in the mean time or going back to school until the economy picks up.

8. a. and c. are likely to increase the unemployment rate. Lengthening the time workers are eligible to receive unemployment insurance lowers the opportunity cost of job search. An increase in union membership pushes more wages above market wages. B. and d. are likely to reduce the unemployment rate. Abolishing the minimum wage lowers the wage from above the market wage for some workers. Making information on job openings more available lowers the search involve in frictional unemployment.

10. The efficiency wage argument states, especially where it is difficult to monitor workers, that a firm may want to pay a wage higher than the equilibrium wage in order to increase worker productivity.

12. An increase in the number of discouraged workers who were previously unemployed could cause the number of people counted as unemployed (and the labor force) to fall by enough to decrease the unemployment rate, even though employment declined.

14. The statement misinterprets the CPI. The inflation rate in 2004 is the percentage change in the CPI since 2003, not since the base year.

16.

Year

Nominal GDP

(billions of dollars)

GDP Price Deflator

(1996 = 100)

Real GDP

(billions of 1996 dollars)

1929 $103.70 12.62 $821.71 1933 $56.40 9.36 $602.56 Percentage decline in real GDP = [($602.56 - $821.71) / $821.71] x 100 = -26.7%

18.

Original Rank New

Rank Film

Total Box

Office

Receipts ($)

Year

Released CPI

Value of Box

Office Receipts in

2004 Dollars

62 1 Gone with the

Wind

198,655,278 1939 14 2,681,846,253

70 2

Snow

White

and

the Seven Dwarfs

184,208,842 1937 14 2,486,819,367

2 3

Star

Wars 460,935,655

1977

61

1,428,144,898 110 4 The Sound of

Music

163,214,286 1965 32 963,984,377

129 5 One Hundred and

One Dalmatians

153,000,000 1961 30 963,900,000

31 6

Jaws 260,000,000

1975 54 910,000,000

4 7 E.T. the Extra-

Terrestrial

434,949,459 1982 97 847,478,843

1 8

Titanic 600,779,824

1997

161

705,263,272

5 9 Star Wars: Episode

I – The Phantom

Menace

431,065,444 1999 167 487,852,508

10 10

Jurassic

Park 356,784,000 1993 145 465,049,490

3 11

Shrek

2 436,471,036

2004

189

436,471,036

6 12

Spider-Man 403,706,375

2002

180

403,706,375

7 13 Lord of the Rings:

The Return of the

King

377,019,252 2003 184 387,264,340

8 14

Spider-Man

2 373,377,893

2004

189

373,377,893

9 15 The Passion of the

Christ

370,270,943 2004 189 370,270,943

To calculate the box office receipts for each film in 2004 dollars, multiple the box office receipts by the

CPI for 2004 (189) divided by the CPI for the year the movie was released.

20. The reporter does not understand the definition of deflation. Deflation occurs when

the price level declines. Inflation, even if only half the national rate, increases the price level. It is not possible for the CPI to drop below zero.

22. When there is deflation, the real interest rate on loans increases. Therefore, the

burden of debt on farmers would have increased during these years.

Chapter 9

Answers to End-of-Chapter Problems and Applications

2. The $1 million per year would buy a lot of goods and services, but in 1900 there were no antibiotics, no automobiles, no televisions, no computers, no cell phones, and infant mortality was much higher.

4. Growth rate for 1991 =

113

,7113

,7101,7? x 100 = -0.17%

Growth rate for 1992 =

101,7101

,7337,7? x 100 = 3.32%

Growth rate for 1993 =

337,7337

,7533,7? x 100 = 2.67%

Growth rate for 1994 =

533

,7533

,7836,7? x 100 = 4.02%

Average annual growth =

4

02

.467.232.317.0+++?% = 2.46%

6. Use the rule of 70: Number of years to double = 10

70

= 7.

8. In the long run, transforming the economy into a market system will be more important for China’s economic growth. The movement of workers from agriculture to manufacturing,represents a “one-shot” change that will eventually come to an end. Moving towards market principles will induce more technological advances and innovations.

10. a. Private saving: S private = Y + TR – C – T = $11 trillion + $1 trillion - $8 trillion - $3 trillion = $1 t rillion

b. Public saving: S public = T – G – TR, but G not given. Use I = S private + S public;

$2 trillion = $1 trillion + S public; S public = $1 trillion

c. Government purchases: Solve using S public = T – G – TR, or I = Y – C – G

G = $1 trillion

d. Government budget surplus = T – G – TR = $1 trillion

12. S and I must drop by $0.5 trillion. I = S = Y – C – G. With no change in Y and C, an increase in G must drop I and S by the same amount.

14. a. Both the equilibrium interest rate and the quantity of loanable funds increase.

b. The demand for loanable funds increased. For a given demand for loanable funds, an increase

in the interest rate does decrease the quantity of loanable funds demanded.

c. If the interest rate had remained at i1, the quantity of loanable funds demanded would have

increased from L1 to L3.

d. With the increase in the interest rate from i1 to i2, the quantity of loanable funds supplied

increase from L1 to L2.

16. An increase in business taxes will decrease the after-tax rate of return on investment projects, which will decrease the demand for loanable funds. The equilibrium real interest rate and quantity of loanable funds will both decrease, which will decrease the quantity of investment and the economy’s future capital stock.

18. The after-tax return to savers would rise, which would increase the supply of loanable funds. The equilibrium real interest rate will fall, but the quantity of loanable funds would increase, as would the quantity of saving and investment.

20. Disagree, because economic growth is the percentage change in real GDP. The statement confuses the level of real GDP with the percentage change in real GDP.

22. Your firm will most likely still be operating below capacity. Also, before rehiring you will want to make sure that the increase in economic activity last.

Chapter 10

Answers to End-of-Chapter Problems and Applications

2. The total percentage increase in real GDP per capita between 1997 and 2000 =

%0.7100502,32$502,32$788,34$=×??

?????.

We can use the following table to calculate the average annual growth rate of real GDP per capita.

Year Real GDP per Capita

(1996 prices)

Annual

Growth Rate

1996 $31,403

1997 32,502 3.50%

1998 33,550 3.22%

1999 34,729 3.51%

2000 34,788 1.70%

Average 2.98%

The average annual growth rate in real GDP per capita from 1997 to 2000 was 2.98%.

4. a. results in a movement along. b. and c. result in a shift.

6. This strategy ran into the problem of diminishing returns to capital. The policy of very high rates of investment with little emphasis on technological change meant that the capital stock was increasing much more rapidly than technology. As a result, diminishing marginal returns set in and the growth rate of real GDP per capita stagnated.

8. These statistics are not consistent with the predictions of catch-up. The United States should have had the lowest growth rate and Ethiopia should have had the highest.

10. Excess public sector borrowing will reduce the savings available to domestic businesses to finance capital investments. Corruption and a politicized judicial system make it difficult for the market system to work efficiently, because they undermine the rule of law and property rights.

12. Because even though they are not spending their own money, salaried managers in the United States are given economic incentives that lead them to adopt new technologies.

14. From Figure 10-7 the annual rate of labor productivity in Germany from 1996-2004 equaled less than 1 percent. At a growth rate of less than 1 percent, it would over 70 years for labor productivity to double in value.

16. The multinationals can provide foreign direct investment and access to new technologies.

18. The free-trade negotiations and investors can enhance foreign direct investment, foreign portfolio investment, and access to new technologies. See Figure 10-12 for the relationship between the level of globalization and the average annual growth rate of real GDP per capita. An Inside Look for this chapter also discusses the benefits that foreign direct investment have had for India.

20. A free press could serve as a watchdog against corruption, which undermines the rule of law and property rights. Over time, crusading newspapers could help reduce corruption and improve the rule of law.

Chapter 11

Answers to End-of-Chapter Problems and Applications

2. Consumption would become less sensitive to current income because consumers would be able to use borrowing to smooth out the effects of changes in their incomes.

4. It is likely to fluctuate less over the business cycle, because current disposable income will fluctuate less.

6.

Net exports equal the value of exports minus the value of imports. Net exports are graphed as a downward sloping line, because increases in real GDP will not affect exports, but will cause imports to increase, thereby causing net exports to decline.

8.

National

Income

and Real GDP Consumption

(C)

Planned

Investment

(I)

Government

Purchases

(G)

Net

Exports

(NX)

Planned

Aggregate

Expenditures

(AE)

Unplanned

Change in

Inventories

$9,000 $7,600 $1,200 $1,200 –$400 $9,600 -$600 $10,000 $8,400 $1,200 $1,200 –$400 $10,400 -$400 $11,000 $9,200 $1,200 $1,200 –$400 $11,200 -$200 $12,000 $10,000 $1,200 $1,200 –$400 $12,000 0 $13,000 $10,800 $1,200 $1,200 –$400 $12,800 $200

a. MPC = 0.8

b. Equilibrium real GDP equals $12,000.

10. The argument is incorrect. Aggregate expenditure includes not just consumption, but also investment, government purchases, and net exports. A decline in GDP can be caused by a decline in any of the four components of aggregate expenditure.

12. Aggregate expenditure must have been greater than GDP.

14. Yes. An unplanned increase in inventories indicates that firms experienced sales that were lower than expected. Firms are likely to respond by cutting production. A planned increase in inventories indicates that firms expect their sales to be increasing.

16. a. Inventories are increasing and GE is likely to decrease its future production.

b. Inventories are decreasing and Ford is likely to increase its future production.

18. The statement is incorrect because it ignores the effects of the multiplier process. The decline in investment reduces income, which reduces consumption, which reduces income, which reduces consumption, and on and on until the multiplier process has finished.

20. A larger multiplier would be likely to lead to longer and more severe recessions because it would magnify the impact on the economy of changes in autonomous expenditures.

22. “Business spending” refers to investment spending and it can lift or sink the economy through the multiplier process. The graph below illustrates the multiplier effect of an increase in investment spending on the equilibrium level of real GDP.

Chapter 12

Answers to End-of-Chapter Problems and Applications

2. a. A higher price level would cause a movement along the long-run aggregate supply curve.

b. An increase in the labor force would cause the long-run aggregate supply curve to shift

outward.

c. An increase in the quantity of capital goods would cause the long-run aggregate supply curve

to shift outward.

d. Technological change would cause the long-run aggregate supply curve to shift outward.

4. Disagree. The increase in aggregate supply with the resulting drop in the price level will not cause

a shift in aggregate demand, but simply a movement along the aggregate demand curve.

6. As explained in the text, most economists would say no. If workers and firms could always predict next year’s price level with perfect accuracy the SRAS would be a vertical line, just as the LRAS curve is.

8. a. In 2004 the actual market price of steel turned out to be higher than the expected market price of steel when U.S. Steel negotiated the contracts before 2004.

b. The production of both will increase. With the price of steel in the U.S. Steel contracts below the market price of steel, companies using steel will demand more steel and produce more of their products.

10. a.

The increase in aggregate demand moves the economy from point A to point B with a higher price level and real GDP. Workers and firms will adjust to the price level being higher than they expected. Workers will push for higher wages and firms will charge higher prices, causing short-run aggregate supply to decrease. The economy will be back in long-run equilibrium at point C with a higher price level and potential GDP.

b.

An unexpected increase in the price of an important raw material decreases short-run aggregate supply, moving the economy from point A to point B with a higher price level and lower real GDP. The drop in real GDP and the increase in unemployment induces workers to accept lower wages and firms to accept lower prices. Short-run aggregate supply shifts from SRAS2 to SRAS1, moving the economy from point B to point A.

12.

To go from potential real GDP in 2006 to potential real GDP in 2007 without inflation, aggregate demand, long-run aggregate supply, and short-run aggregate supply must all increase – or, shift to the right on the graph – by the same amount.

14. a. If firms operate beyond their normal capacity and structural and frictional

unemployment drop below their normal levels, then actual real GDP can be above

potential real GDP.

b. The unemployment rate increased from 1969 to 1970 because the increase in

actual real GDP was not as large as the increase in potential real GDP.

c. If the recession was caused by a shift in aggregate demand (which, in fact, it

was), the inflation rate is likely to have been lower in 1970 than in 1969. If the

recession was caused by a shift in aggregate supply, the inflation rate was likely to have been higher.

16. a. Points A and C.

D represents the short-run equilibrium and point C the long-run

b. Point

equilibrium. Workers and firms will adjust to the price level being higher than they

expected. Workers will push for higher wages and firms will charge higher prices,

causing short-run aggregate supply to decrease.

18. Disagree. The statement confuses the inflation rate with the price level. The decline in aggregate demand in 2001 did cause the inflation rate to fall, but the inflation rate was still positive, meaning that the price level increased.

20. A decline in stock prices would “weigh heavily” on businesses and consumers because it decreases household wealth, which decreases consumer spending. The drop in stock prices also made it harder for businesses to finance investment spending. These restraints on consumption and investment spending slowed down total spending in the economy and contributed to the slow recovery from the 2001 recession.

22. The economy, even though out of the recession, grew slowly in 2002 and was well below potential real GDP. The unemployment rate increased from 4.7 percent in 2001 to 5.8 percent in 2002.