Question 1: By using an Internet mapping page, create a map of your neighborhood and answer the given questions:
a) How is the map like a model?
b) What is the limitation of the map?
c) Could you use this map to find out change in elevation in your neighborhood? Distance from one place to the other? Traffic speed? What do your answers recommend about what to consider when employing a map or a model?
Question 2: ‘The Economic Report of the President’ comprises of statistical information regarding the economy and also the Council of Economic Adviser’s analysis of current policy issues. Find a out recent copy of this annual report at the library or visit https://w3.access.gpo.gov/eop/ and read a chapter regarding an issue which interests you. Summarize the economic problem at hand and explain the council’s recommended policy.
Question 3: Would you expect economists to disagree less regarding public policy as time goes on? Why or why not? Can their differences be completely removed? Why or why not?
Question 4: Please write short regarding complete answers.
a) What is the fundamental economic problem?
b) What three problems should any economic system solve?
c) How does capitalism solve such three problems?
d) How did Soviet-style socialism solve these three problems?
e) Can you think of any reason inherent in a centrally planned economy (soviet-style socialism) that would make innovation difficult? Can you think of any reason inherent in a capitalist country which would foster innovation?
Question 5: Why do most economists oppose the trade restrictions?
Question 6: STATA exercises:
a) Go to the web site of the Federal Reserve Bank of Saint Louis and look for the FRED database (www.stls.frb.org). Download the series of quarterly data for US real gross domestic product in chained 1996 dollars form1950:1 to 2001:1.
b) Plot the series against time.
c) Calculate the series of log GDP and does a time plot for it. Compare this graph to the previous one.
d) Decompose the series into trend and cycle using a linear deterministic trend model, that is, run the given regression: yt = α + βt + εt. Now use your estimates and fitted values to find the trend and the cycle of the original series.
d) Plot in the same graph the trend (expected values and the original data against time).
e) Plot a cycle against time. What can you say regarding the stationarity of the cycle (detrended) series?