Start Discovering Solved Questions and Your Course Assignments
TextBooks Included
Solved Assignments
Asked Questions
Answered Questions
What further information would be required to determine the underlying rate of inflation? Suppose the core rate for the intermediate rate rose 0.1%.
Why would have been the case had the auto industry merely announced an actual 2% price reduction.
What major factor causes the implicit price deflator and the chained price deflator to diverge over time?
Explain why current income would be the case most of the time. In what circumstances would you expect it not to be the case?
Yet we find that for any given year, the saving rate has a strong positive correlation with the level of income. How can these facts be reconciled?
What impact do you think this had on consumption and saving? In mid-2001, a rebate of about $45 billion, representing the same proportion of disposable income.
What would you expect to happen to the personal saving rate in late 1968, 1969, the first half of 1970, and the last half of 1970?
From mid-1996 to mid-1999, the personal saving rate fell from 5% to 3%. What were the principal factors that caused this decline?
What can you say about the relative impact of monetary and fiscal policy on consumer spending?
The personal saving rate fell sharply over that period. Why did the saving rate fall after the Reagan tax cut but not after the Kennedy-Johnson tax cut?
Yet during that same period, the personal saving rate as reported by the BEA declined sharply. What factors accounted for this divergence?
What do you think would happen to total consumption? Purchases of consumer durables? The price of pharmaceutical company stocks?
In terms of the LCH, how would these changes affect current consumption plans of those 65 and older?
What were the principal factors that caused the ratio of the purchase of producers' durable equipment to GDP to rise so much during the 1990s?
Explain why you would advocate or oppose this bill as a lobbyist for General Motors, Disney, Exxon Mobil, Georgia Pacific and Citigroup.
If that indeed case do you think subsidy is good public policy? Would your answers be any different if McDonnell Douglas were still in business as a competitor?
Why did firms continue to boost their capital spending even as the rate of capacity utilization declined?
In order to explain the difference in growth rates of the economy during these two periods, what other information would you need?
Explain why you agree or disagree with this last sentence. What do you think would have happened to the personal saving rate?
How do you think the overall economy would have responded? However, suppose government saving had not declined.
The Federal funds rate averaged almost 10% even though the inflation rate for that period was 3.8%. Why do you think the Fed kept it so high?
Bond yields also fell sharply that year. Since funds rate was well below its equilibrium value, why didn't inflationary expectations push bond yields higher?
What causes an inverted yield spread, and why has it always been followed by a recession the next year?
In October 1987, the US stock market crashed, with the Dow Jones Industrial. Why did the decline in stock prices fail to slow the pace of economic activity?