Macroeconomics
13th Edition
ISBN: 9780134735696
Author: PARKIN, Michael
Publisher: Pearson,
expand_more
expand_more
format_list_bulleted
Question
Chapter 21, Problem 26APA
(a)
To determine
Explain what is wrong with the growth rate of real
(b)
To determine
Determine how does the price of a smartphone today compared with the 1991 prices of items supports the arguments put forward by Mr. Feldstein.
(c)
To determine
Determine how the falling share of household production in total production modifies the argument of Mr. Feldstein.
(d)
To determine
Determine the reasons that make the growth rate of real GDP per person an incomplete measure of the standard of living.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Problem 1
Experiments/Randomized Control Trial
Suppose you are interested in studying the effect of being a part of the labor union on an
individual's hourly wage.
You collect data on 1000 people and run the following regression.
Wage=Bo+B₁Labor Union; + &¿
where Labor Union is a dummy variable which is equal t to 1 for people who are a part of
labor union and 0 for others.
a. Suppose you estimate
b. Do you think
B₁ = 1.6. Interpret B₁ (5 points)
1
1
is biased or unbiased? Explain. (5 points)
Now suppose you conduct a randomized control trial to answer the same question. You
randomly assign some individuals to be a part of the labor union and others to not be a part
of the labor union. The first step you take is to ensure that the randomization was done
correctly. Then you estimate the following equation:
=
Wage, Bo+B₁Treatment; + &;
Treatment =1 if the student is assigned to be a part of Labor Union
Treatment=0 if the student is assigned to not be a part of Labor Union
c. Why is it…
The figure to the right contains a point indicating the economy's initial price and aggregate output
(Upper P 0P0,Upper Y 0Y0)
combination.
Suppose that the price level rises such that
P Subscript 1
>
P Subscript 0.
Using the point drawing tool, identify a potential location for the economy's new price and aggregate output
(Upper P 1P1,Upper Y 1Y1)
combination. Label this point
B.
Using the line drawing tool, draw the aggregate demand curve through these points. Properly label the line.
picture is attached
Question content area left
Part 1
The figure to the right gives an economy's initial aggregate demand (AD) curve.
Using the line drawing tool, show a decrease in aggregate demand. Properly label this line.
Part 2
Note: Carefully follow the instructions above and only draw the required object.
Part 3
Which of the following will generate a decrease in aggregate demand?
A.
Increased government expenditures for infrastructure.
B.
A tax increase.
C.
An increase in the price level.
D.
An increase in the money supply.
Chapter 21 Solutions
Macroeconomics
Ch. 21.1 - Prob. 1RQCh. 21.1 - Prob. 2RQCh. 21.1 - Prob. 3RQCh. 21.2 - Prob. 1RQCh. 21.2 - Prob. 2RQCh. 21.2 - Prob. 3RQCh. 21.2 - Prob. 4RQCh. 21.2 - Prob. 5RQCh. 21.3 - Prob. 1RQCh. 21.3 - Prob. 2RQ
Ch. 21.3 - Prob. 3RQCh. 21.3 - Prob. 4RQCh. 21.3 - Prob. 5RQCh. 21 - Prob. 1SPACh. 21 - Prob. 2SPACh. 21 - Prob. 3SPACh. 21 - Prob. 4SPACh. 21 - Prob. 5SPACh. 21 - Prob. 6SPACh. 21 - Prob. 7SPACh. 21 - Prob. 8SPACh. 21 - Prob. 9APACh. 21 - Prob. 10APACh. 21 - Prob. 11APACh. 21 - Prob. 12APACh. 21 - Prob. 13APACh. 21 - Prob. 14APACh. 21 - Prob. 15APACh. 21 - Prob. 16APACh. 21 - Prob. 17APACh. 21 - Prob. 18APACh. 21 - Prob. 19APACh. 21 - Prob. 20APACh. 21 - Prob. 21APACh. 21 - Prob. 22APACh. 21 - Prob. 23APACh. 21 - Prob. 24APACh. 21 - Prob. 25APACh. 21 - Prob. 26APACh. 21 - Prob. 27APACh. 21 - Prob. 28APA
Knowledge Booster
Similar questions
- A movie theater is showing two different movies: a Hollywood blockbuster (with 100 customers willing to pay $10 for a ticket, and 100 willing to pay $8) and an independent film that attracts 50 film buffs, willing to pay $20 each. Marginal costs are zero and neither movie can fill theater capacity. What is the theater's maximum profit if it cannot price discriminate (it must charge the same price for both movies) and if it can price discriminate (it may charge different prices for different movies)? a. $2,000; $2,600 b. $1,500; $2,100 c. $1,500; $2,000arrow_forwardA movie theater is showing two different movies: a Hollywood blockbuster (with 100 customers willing to pay $10 for a ticket, and 100 willing to pay $8) and an independent film that attracts 50 film buffs, willing to pay $20 each. Marginal costs are zero and neither movie can fill theater capacity. What is the theater's maximum profit if it cannot price discriminate (it must charge the same price for both movies) and if it can price discriminate (it may charge different prices for different movies)? a. $2,000; $2,600 b. $1,500; $2,100 c. $1,500; $2,000arrow_forwardWhat profi is most important in business ?arrow_forward
- 5. Download the Excel sheet from Brightspace. The data contains the GDP per capita and GNI per capita of OECD member countries in 2014 (both figures are reported in US dollars). The countries are ranked by GDP per capita. a. Compute the ratio of GNI to GDP for each country (GNI per capita/GDP per capita). What does this imply about net factor income from abroad for each country? b. Rank the countries based on the GNI/GDP ratio, starting with the country with the highest ratio and ending with the country with the lowest ratio. Which country has the highest ratio, and which has the lowest? c. Comment on why the countries you identified in the previous question have a large difference between GDP and GNI? What does the difference imply?arrow_forward3. Answer the following questions about external wealth. a. Home has external wealth of $100 million in period t. In t+1, Home purchases $160 million foreign assets, and Foreign purchases $120 million in Home assets. Assume a world interest rate of 10% per annum. Compute the "change" in external wealth at t+1 for Home. b. A country's external wealth was -$1.5 billion at the end of 2015, and its trade balance was $750 million in 2016. Assume the world interest rate is 5% per annum. What is the "value" of a country's external wealth at the end of 2016?arrow_forward1. The table below shows a country's hypothetical national income and product accounts data. Category Consumption (personal consumption expenditures) Investment (gross private domestic investment) Government consumption (government expenditures) Exports Imports Net Factor Income from Abroad Net unilateral transfers Billions of Dollars 8,000 1,300 2,100 900 1,750 +45 -20 a. Compute the following accounts using the information in the table: Gross national expenditure (GNE) . Trade balance (TB) • Gross domestic product (GDP) • Gross national income (GNI) . Gross national disposable income (GNDI) Current account (CA) b. Derive the current account identity using the national income identity. Are savings greater than or smaller than investment in this country? The national income identity is: GNDIGNE + CA, GNE = C + G + I.arrow_forward
- 4. Assume that a country produces an output Q of 50 every year. The world interest rate is 10%. Consumption C is 50 every year, and I = G = 0. There is an unexpected drop in output in year 0, so output falls to 28 and is then expected to return to 50 in every future year. If the country desires to smooth consumption, how much should it borrow in period 0? What will the new level of consumption be from then on?arrow_forward2. Show how each of the following would affect the following US balance of payments: trade balance (TB), net factor income abroad (NFIA), net unilateral transfers (NUT), financial account (FA), and capital account (KA). Identify which specific account is affected in each case (e.g., +$10 in TB). Note that the sum of the balance of payment accounts is zero. Example: A California computer manufacturer purchases a $50 hard disk from a Malaysian company, paying the funds from a bank account in Malaysia. Answer: The US imports a hard disk from Malaysia: TB = $50 The US draws a foreign asset to pay for the import (less external asset): FA = +$50. (Note: The balance of payment identity holds: CA + FA (+KA) = −- $50 + $50 = 0. No KA in this example.) a. A US tourist in Japan sells his iPod to a local resident for yen worth $100. (hint: A US tourist obtains Japanese currency.) b. A US owner of Honda shares receives $10,000 in dividend payments, which are paid into a Tokyo bank. c. The central…arrow_forwardMark's Pizza Enter George's Pizza Stay Out Advertise $50, -$2 $175, $0 Do Not Advertise $150, $15 $100, $0 In their quest to maximize combined total profits, Mark and George's Pizzas find themselves at a critical juncture. As they carefully evaluate the potential outcomes and weigh their strategic options, the future of Moncton's pizza industry hangs in the balance. Let's imagine both players are analyzing the payoff matrix seeking the optimal combination of actions that will yield the highest collective profit. What actions maximize their combined total profits? a. Mark's Pizza to "Advertise" and George's Pizza to "Stay Out". b. Mark's Pizza to "Do Not Advertise" and George's Pizza to "Stay Out" C. Mark's Pizza to Do Not Advertise" and George's Pizza to "Enter" d. Mark's Pizza to "Advertise" and George's Pizza to "Enter"arrow_forward
- With your team I would like you to complete the following questions after please post your replies and we will discuss in class Choose a financial instrument or market (such as stocks, bonds, insurance, cash, gold, bitcoin). Explain how investments work for the individual investor mainly yourself. With the current market upheaval and uncertainty what would you and your team consider the best options for investment. Consider the idea of short term investing vs long term investing, laddering, safe haven, liquidity, and risk) Consider Roth IRA vs traditional IRA, ETF's, CD's, Mutual Funds. Always consider taxes and inflation your return should always be greater then inflation and taxes.arrow_forwardShort Description Fiscal Policy Graph Details Shown is a Fiscal Policy diagram with the variable Real GDP (billions of dollars) on the x-axis and the variable Price Level on the y-axis. The x-axis is scaled from 0 to 800 billion dollars with an increment of 40 billion dollars, and the y-axis is scaled from 30 to 150 units with an increment of 5 units. Object Details On the graph we have:Four Line Objects:An upward sloping Aggregate Supply, AS line with two endpoints:Point 1 at (160, 70)Point 2 at (720, 140)A downward sloping Aggregate Demand, AD1 line with two endpoints:Point 1 at (80, 110)Point 2 at (640, 40)A vertical Long-run Aggregate Supply, LRAS with two endpoints:Point 1 at (400, 145)Point 2 at (400, 30)A downward sloping Aggregate Demand, AD line with two endpoints:Point 1 at (720, 60)Point 2 at (160, 130)Two Reference Points:Lines AS, AD, and LRAS intersect at (400, 100)Lines AS and AD1 intersect at (280, 85) a. How much does aggregate demand need to change to restore the…arrow_forwardFiscal Policy Graph Details Shown is a Fiscal Policy diagram with the variable Real GDP (billions of dollars) on the x-axis and the variable Price Level on the y-axis. The x-axis is scaled from 0 to 1000 billion dollars with an increment of 50 billion dollars, and the y-axis is scaled from 0 to 180 units with an increment of 10 units. Object Details On the graph we have:Four Line Objects:An upward sloping Aggregate Supply, AS line with two endpoints:Point 1 at (200, 40)Point 2 at (800, 160)A downward sloping Aggregate Demand, AD line with two endpoints:Point 1 at (200, 160)Point 2 at (800, 40)A downward sloping Aggregate Demand, AD1 line with two endpoints:Point 1 at (350, 170)Point 2 at (900, 60)A vertical Long-run Aggregate Supply, LRAS line with two endpoints:Point 1 at (500, 170)Point 2 at (500, 0)Two Reference Points:Lines AS and AD1 intersect at (600, 120)Lines AS, AD, and LRAS intersect at (500, 100) a. How much does aggregate demand need to change to restore the…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
Macroeconomics: Private and Public Choice (MindTa...EconomicsISBN:9781305506756Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning
Economics: Private and Public Choice (MindTap Cou...EconomicsISBN:9781305506725Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning
Exploring EconomicsEconomicsISBN:9781544336329Author:Robert L. SextonPublisher:SAGE Publications, Inc
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning
Macroeconomics: Private and Public Choice (MindTa...
Economics
ISBN:9781305506756
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Economics: Private and Public Choice (MindTap Cou...
Economics
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Exploring Economics
Economics
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:SAGE Publications, Inc