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How should the central bank change its target interest rate in response to each of the following shocks. Use diagrams and explain your results.
What will be the effect of a reduction in the central bank's target interest rate? Construct a diagram and explain your results.
Discuss the implications for what the data can reveal about what is the better business cycle model, the real business cycle model or the New Keynesian model.
How well does the central bank perform in relative to its goal? Explain using diagrams.
What does this imply about the power of monetary policy relative to fiscal policy in closing a positive output gap? Explain your results with the aid of diagram
What is a small open economy? Why is it appropriate to use a small open-economy model to explain events in the United States?
Why could it be a good thing for a country to run a current account deficit? What can constrain borrowing in world markets by an individual country?
What are the effects of a temporary increase in government expenditure on output, absorption, and the current account surplus?
What are the effects of an increase in current and future total factor productivity on output, absorption, and the current account surplus?
Think about a good or service for which you believe there has been a shift in demand or supply.
Read the article from The Economist magazine entitled "Facebook: Imperial Ambitions."
What type of study would be most appropriate to determine the economic value of the goods listed in question 1? Explain fully.
Determine the effects this has on the quantity and price of credit card balances, the demand for money, and the price level. Explain your results.
However, the central bank can observe productivity shocks. How should the central bank conduct monetary policy? Discuss.
Suppose that there is an increase in the number of ATM machines in service. What are the effects of this innovation on demand for money and on the price level?
Determine the effects of a decrease in the capital stock, brought about by a war or natural disaster, on current equilibrium output, employment and real wage.
Write down the government's budget constraint, making sure to take account of who is able to pay their taxes and who does not.
What are the effects of a fully funded social security system? How does the government's ability to commit matter for social security programs?
If the default premium increases, what is the effect on the consumption and savings of an individual consumer?
Calculate the relative price of housing as the Case and Shiller 20-city home price index divided by the consumer price index. What do you see in the plot?
What are the effects of a tax cut on consumption and savings in the presence of a credit market imperfection? Does Ricardian equivalence hold?
What is the equilibrium quantity of credit card balances? In what sense does the economy run more efficiently with R = 0 than with R > 0?
Suppose that v increases with u decreasing by an equal amount. Determine the effects on the level and the rate of growth of consumption.
Determine how r affects the steady state quantity of capita per worker, and per capita income.
Now, suppose that residents of each country were free to live in either country. What would happen, and what conclusions do you draw from this?