Long Run vs. Short Run
|
|
|
- Shanon Tyler
- 7 years ago
- Views:
Transcription
1 Long Run vs. Short Run
2 Long Run vs. Short Run Growth is about the long run.
3 Long Run vs. Short Run Growth is about the long run. Now we return to the short run and the study of business cycles.
4 Long Run vs. Short Run Growth is about the long run. Now we return to the short run and the study of business cycles. The central framework for studying business cycles is the aggregate demand-aggregate supply (or AD-AS) model.
5
6 Growth vs. Business Cycles
7 Growth vs. Business Cycles Growth is mainly about how the natural rate of output (sometimes called potential output) changes through increases in an economy s productive capacity.
8 Growth vs. Business Cycles Growth is mainly about how the natural rate of output (sometimes called potential output) changes through increases in an economy s productive capacity. In the long run, shifts in the aggregate demand (AD) curve change the price level but not output: the long-run aggregate supply (AS) curve is vertical.
9 Growth vs. Business Cycles Growth is mainly about how the natural rate of output (sometimes called potential output) changes through increases in an economy s productive capacity. In the long run, shifts in the aggregate demand (AD) curve change the price level but not output: the long-run aggregate supply (AS) curve is vertical. In the short run, shifts in the AD curve move both the price level and output (and in the same direction): the short-run AS curve is upward-sloping (but not vertical).
10 Growth vs. Business Cycles Growth is mainly about how the natural rate of output (sometimes called potential output) changes through increases in an economy s productive capacity. In the long run, shifts in the aggregate demand (AD) curve change the price level but not output: the long-run aggregate supply (AS) curve is vertical. In the short run, shifts in the AD curve move both the price level and output (and in the same direction): the short-run AS curve is upward-sloping (but not vertical). These short-run movements in output are driven mainly by short-run movements in employment (and especially short-run movements in the unemployment rate).
11 Growth vs. Business Cycles Growth is mainly about how the natural rate of output (sometimes called potential output) changes through increases in an economy s productive capacity. In the long run, shifts in the aggregate demand (AD) curve change the price level but not output: the long-run aggregate supply (AS) curve is vertical. In the short run, shifts in the AD curve move both the price level and output (and in the same direction): the short-run AS curve is upward-sloping (but not vertical). These short-run movements in output are driven mainly by short-run movements in employment (and especially short-run movements in the unemployment rate). Let s look at the data on unemployment....
12 Table 3.4 Employment Status of the U.S. Adult Population, February 2003 Copyright 2005 Pearson Addison-Wesley. All rights reserved. 3-23
13
14 Figure 3.15 Changes in employment status in a typical month Copyright 2005 Pearson Addison-Wesley. All rights reserved. 3-24
15
16 Figure 1.3 The U.S. unemployment rate, Copyright 2005 Pearson Addison-Wesley. All rights reserved. 1-4
17 Figure 1.1 Output of the U.S. economy, Copyright 2005 Pearson Addison-Wesley. All rights reserved. 1-2
18 Figure 8.1 A business cycle Copyright 2005 Pearson Addison-Wesley. All rights reserved. 8-2
19 Table 8.1 NBER Business Cycle Turning Points and Durations of Post 1854 Business Cycles 8-3
20 Figure 8.6 Cyclical behavior of civilian employment Copyright 2005 Pearson Addison-Wesley. All rights reserved. 8-9
21 Figure 8.7 Cyclical behavior of the unemployment rate Copyright 2005 Pearson Addison-Wesley. All rights reserved. 8-10
22
23
24
25
26 Figure 3.16 Okun s law in the United States: Copyright 2005 Pearson Addison-Wesley. All rights reserved. 3-25
27 Sources of Unemployment
28 Sources of Unemployment There are two sources of unemployment: frictional unemployment and structural unemployment.
29 Sources of Unemployment There are two sources of unemployment: frictional unemployment and structural unemployment. Frictional unemployment arises through the normal and efficient functioning of a market economy.
30 Sources of Unemployment There are two sources of unemployment: frictional unemployment and structural unemployment. Frictional unemployment arises through the normal and efficient functioning of a market economy. Workers and firms need to find each other:
31 Sources of Unemployment There are two sources of unemployment: frictional unemployment and structural unemployment. Frictional unemployment arises through the normal and efficient functioning of a market economy. Workers and firms need to find each other: this search and matching process takes time.
32 Sources of Unemployment There are two sources of unemployment: frictional unemployment and structural unemployment. Frictional unemployment arises through the normal and efficient functioning of a market economy. Workers and firms need to find each other: this search and matching process takes time. There is a lot of churning in the labor market:
33 Sources of Unemployment There are two sources of unemployment: frictional unemployment and structural unemployment. Frictional unemployment arises through the normal and efficient functioning of a market economy. Workers and firms need to find each other: this search and matching process takes time. There is a lot of churning in the labor market: every month thousands of jobs are created and destroyed.
34 Sources of Unemployment There are two sources of unemployment: frictional unemployment and structural unemployment. Frictional unemployment arises through the normal and efficient functioning of a market economy. Workers and firms need to find each other: this search and matching process takes time. There is a lot of churning in the labor market: every month thousands of jobs are created and destroyed. In addition, in every month thousands of workers enter the labor force for the first time
35 Sources of Unemployment There are two sources of unemployment: frictional unemployment and structural unemployment. Frictional unemployment arises through the normal and efficient functioning of a market economy. Workers and firms need to find each other: this search and matching process takes time. There is a lot of churning in the labor market: every month thousands of jobs are created and destroyed. In addition, in every month thousands of workers enter the labor force for the first time and leave it for the last time (retirement).
36 Sources of Unemployment There are two sources of unemployment: frictional unemployment and structural unemployment. Frictional unemployment arises through the normal and efficient functioning of a market economy. Workers and firms need to find each other: this search and matching process takes time. There is a lot of churning in the labor market: every month thousands of jobs are created and destroyed. In addition, in every month thousands of workers enter the labor force for the first time and leave it for the last time (retirement). Lesson: Search and matching is a costly, time-consuming process, leading to frictional unemployment even in a well-functioning, healthy economy.
37
38
39 Structural Unemployment
40 Structural Unemployment Structural unemployment arises when wages do not adjust to clearthelabormarket.
41 Structural Unemployment Structural unemployment arises when wages do not adjust to clearthelabormarket. Why might this happen?
42 Structural Unemployment Structural unemployment arises when wages do not adjust to clearthelabormarket. Why might this happen? Four possibilities:
43 Structural Unemployment Structural unemployment arises when wages do not adjust to clearthelabormarket. Why might this happen? Four possibilities: 1. Minimum wage laws (the living wage)
44 Structural Unemployment Structural unemployment arises when wages do not adjust to clearthelabormarket. Why might this happen? Four possibilities: 1. Minimum wage laws (the living wage) 2. Unions
45 Structural Unemployment Structural unemployment arises when wages do not adjust to clearthelabormarket. Why might this happen? Four possibilities: 1. Minimum wage laws (the living wage) 2. Unions 3. Efficiency wages
46 Structural Unemployment Structural unemployment arises when wages do not adjust to clearthelabormarket. Why might this happen? Four possibilities: 1. Minimum wage laws (the living wage) 2. Unions 3. Efficiency wages 4. Morale
47 Structural Unemployment Structural unemployment arises when wages do not adjust to clearthelabormarket. Why might this happen? Four possibilities: 1. Minimum wage laws (the living wage) 2. Unions 3. Efficiency wages 4. Morale Minimum wage laws restrict the market wage from dropping below a specified minimum wage.
48 Structural Unemployment Structural unemployment arises when wages do not adjust to clearthelabormarket. Why might this happen? Four possibilities: 1. Minimum wage laws (the living wage) 2. Unions 3. Efficiency wages 4. Morale Minimum wage laws restrict the market wage from dropping below a specified minimum wage. This minimum wage could be above the wage that clears the labor market (i.e., the wage that eliminates excess supply in the labor market).
49
50 Unions
51 Unions Unions are collections of workers.
52 Unions Unions are collections of workers. On behalf of their members, unions negotiate with employers over wages, benefits, and working conditions (sometimes called collective bargaining).
53 Unions Unions are collections of workers. On behalf of their members, unions negotiate with employers over wages, benefits, and working conditions (sometimes called collective bargaining). Workers in unions tend to earn higher wages than workers not in unions.
54 Unions Unions are collections of workers. On behalf of their members, unions negotiate with employers over wages, benefits, and working conditions (sometimes called collective bargaining). Workers in unions tend to earn higher wages than workers not in unions. If the union wage is above the market-clearing wage, then there is an excess supply of labor (or unemployment), just as therewouldbeunderaminimumwagelaw.
55 Efficiency Wages
56 Efficiency Wages Firms might pay a wage higher than the market-clearing wage because firms can operate more efficiently if they do so.
57 Efficiency Wages Firms might pay a wage higher than the market-clearing wage because firms can operate more efficiently if they do so. Why?
58 Efficiency Wages Firms might pay a wage higher than the market-clearing wage because firms can operate more efficiently if they do so. Why? Efficiency wages:
59 Efficiency Wages Firms might pay a wage higher than the market-clearing wage because firms can operate more efficiently if they do so. Why? Efficiency wages: 1. Reduce worker turnover, thereby reducing the cost of hiring and training workers.
60 Efficiency Wages Firms might pay a wage higher than the market-clearing wage because firms can operate more efficiently if they do so. Why? Efficiency wages: 1. Reduce worker turnover, thereby reducing the cost of hiring and training workers. 2. Increase worker quality by attracting a better pool of job applicants.
61 Efficiency Wages Firms might pay a wage higher than the market-clearing wage because firms can operate more efficiently if they do so. Why? Efficiency wages: 1. Reduce worker turnover, thereby reducing the cost of hiring and training workers. 2. Increase worker quality by attracting a better pool of job applicants. If the firm lowered its wage, the best workers would seek good-paying jobs elsewhere.
62 Efficiency Wages Firms might pay a wage higher than the market-clearing wage because firms can operate more efficiently if they do so. Why? Efficiency wages: 1. Reduce worker turnover, thereby reducing the cost of hiring and training workers. 2. Increase worker quality by attracting a better pool of job applicants. If the firm lowered its wage, the best workers would seek good-paying jobs elsewhere. 3. Increase worker effort.
63 Efficiency Wages Firms might pay a wage higher than the market-clearing wage because firms can operate more efficiently if they do so. Why? Efficiency wages: 1. Reduce worker turnover, thereby reducing the cost of hiring and training workers. 2. Increase worker quality by attracting a better pool of job applicants. If the firm lowered its wage, the best workers would seek good-paying jobs elsewhere. 3. Increase worker effort. Workers who are receiving better-than-market wages will exert more effort to keep from being fired.
64 Efficiency Wages Firms might pay a wage higher than the market-clearing wage because firms can operate more efficiently if they do so. Why? Efficiency wages: 1. Reduce worker turnover, thereby reducing the cost of hiring and training workers. 2. Increase worker quality by attracting a better pool of job applicants. If the firm lowered its wage, the best workers would seek good-paying jobs elsewhere. 3. Increase worker effort. Workers who are receiving better-than-market wages will exert more effort to keep from being fired. 4. Increase morale (Truman Bewley).
65 Efficiency Wages Firms might pay a wage higher than the market-clearing wage because firms can operate more efficiently if they do so. Why? Efficiency wages: 1. Reduce worker turnover, thereby reducing the cost of hiring and training workers. 2. Increase worker quality by attracting a better pool of job applicants. If the firm lowered its wage, the best workers would seek good-paying jobs elsewhere. 3. Increase worker effort. Workers who are receiving better-than-market wages will exert more effort to keep from being fired. 4. Increase morale (Truman Bewley). Firms would rather fire employees than cut wages for all employees because wage cuts reduce morale (thereby lowering worker effort).
Assignment #3. ECON 410.502 Macroeconomic Theory Spring 2010 Instructor: Guangyi Ma. Notice:
ECON 410.502 Macroeconomic Theory Spring 2010 Instructor: Guangyi Ma Assignment #3 Notice: (1) There are 25 multiple-choice problems and 2 analytic (short-answer) problems. This assignment is due on March
Ch.6 Aggregate Supply, Wages, Prices, and Unemployment
1 Econ 302 Intermediate Macroeconomics Chul-Woo Kwon Ch.6 Aggregate Supply, Wages, rices, and Unemployment I. Introduction A. The dynamic changes of and the price adjustment B. Link between the price change
Chapter 13. Aggregate Demand and Aggregate Supply Analysis
Chapter 13. Aggregate Demand and Aggregate Supply Analysis Instructor: JINKOOK LEE Department of Economics / Texas A&M University ECON 203 502 Principles of Macroeconomics In the short run, real GDP and
Agenda. Business Cycles. What Is a Business Cycle? What Is a Business Cycle? What is a Business Cycle? Business Cycle Facts.
Agenda What is a Business Cycle? Business Cycles.. 11-1 11-2 Business cycles are the short-run fluctuations in aggregate economic activity around its long-run growth path. Y Time 11-3 11-4 1 Components
Use the following to answer question 9: Exhibit: Keynesian Cross
1. Leading economic indicators are: A) the most popular economic statistics. B) data that are used to construct the consumer price index and the unemployment rate. C) variables that tend to fluctuate in
LECTURE NOTES ON MACROECONOMIC PRINCIPLES
LECTURE NOTES ON MACROECONOMIC PRINCIPLES Peter Ireland Department of Economics Boston College peter.ireland@bc.edu http://www2.bc.edu/peter-ireland/ec132.html Copyright (c) 2013 by Peter Ireland. Redistribution
Problem Set #4: Aggregate Supply and Aggregate Demand Econ 100B: Intermediate Macroeconomics
roblem Set #4: Aggregate Supply and Aggregate Demand Econ 100B: Intermediate Macroeconomics 1) Explain the differences between demand-pull inflation and cost-push inflation. Demand-pull inflation results
I. Introduction to Aggregate Demand/Aggregate Supply Model
University of California-Davis Economics 1B-Intro to Macro Handout 8 TA: Jason Lee Email: jawlee@ucdavis.edu I. Introduction to Aggregate Demand/Aggregate Supply Model In this chapter we develop a model
Chapter 6 MULTIPLE-CHOICE QUESTIONS
Chapter 6 MULTIPLE-CHOICE QUETION 1. Which one of the following is generally considered a characteristic of a perfectly competitive labor market? a. A few workers of varying skills and capabilities b.
Cosumnes River College Principles of Macroeconomics Problem Set 11 Will Not Be Collected
Name: Solutions Cosumnes River College Principles of Macroeconomics Problem Set 11 Will Not Be Collected Fall 2015 Prof. Dowell Instructions: This problem set will not be collected. You should still work
Effects of Inflation Unanticipated Inflation in the Labor Market
Effects of Inflation Unanticipated Inflation in the Labor Market Unanticipated inflation has two main consequences in the labor market: Redistribution of income Departure from full employment Effects of
Chapter 3 Productivity, Output, and Employment
Chapter 3 Productivity, Output, and Employment Multiple Choice Questions 1. A mathematical expression relating the amount of output produced to quantities of capital and labor utilized is the (a) real
Factors that Shift the IS Curve
Factors that Shift the IS Curve A change in autonomous factors that is unrelated to the interest rate Changes in autonomous consumer expenditure Changes in planned investment spending unrelated to the
Chapter Outline. Chapter 11. Real-Wage Rigidity. Real-Wage Rigidity
Chapter 11 Keynesianism: The Macroeconomics of Wage and Price Rigidity Chapter Outline Real-Wage Rigidity Price Stickiness Monetary and Fiscal Policy in the Keynesian 2008 Pearson Addison-Wesley. All rights
Extra Problems #3. ECON 410.502 Macroeconomic Theory Spring 2010 Instructor: Guangyi Ma. Notice:
ECON 410.502 Macroeconomic Theory Spring 2010 Instructor: Guangyi Ma Extra Problems #3 Notice: (1) There are 25 multiple-choice problems covering Chapter 6, 9, 10, 11. These problems are not homework and
Thinkwell s Homeschool Economics Course Lesson Plan: 36 weeks
Thinkwell s Homeschool Economics Course Lesson Plan: 36 weeks Welcome to Thinkwell s Homeschool Economics! We re thrilled that you ve decided to make us part of your homeschool curriculum. This lesson
Equilibrium in the Aggregate Economy. Equilibrium in Aggregate Economy. Short-Run Equilibrium. Short-Run Equilibrium
quilibrium in Aggregate conomy quilibrium in the Aggregate conomy Changes in the SAS, AD, and curves affect short-run and long-run equilibrium. Short-Run quilibrium Short-run equilibrium is where the AS
7 AGGREGATE SUPPLY AND AGGREGATE DEMAND* Chapter. Key Concepts
Chapter 7 AGGREGATE SUPPLY AND AGGREGATE DEMAND* Key Concepts Aggregate Supply The aggregate production function shows that the quantity of real GDP (Y ) supplied depends on the quantity of labor (L ),
CH 10 - REVIEW QUESTIONS
CH 10 - REVIEW QUESTIONS 1. The short-run aggregate supply curve is horizontal at: A) a level of output determined by aggregate demand. B) the natural level of output. C) the level of output at which the
Pre-Test Chapter 15 ed17
Pre-Test Chapter 15 ed17 Multiple Choice Questions 1. The extended AD-AS model: A. distinguishes between short-run and long-run aggregate demand. B. explains inflation but not recession. C. includes G
Labor Market and Unemployment Ing. Mansoor Maitah Ph.D.
Labor Market and Unemployment Ing. Mansoor Maitah Ph.D. Product and Factor Markets Demand for Goods and Services Market of Goods and Services S D Supply of Goods and Services Households Firms Supply of
ECON 3312 Macroeconomics Exam 3 Fall 2014. Name MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
ECON 3312 Macroeconomics Exam 3 Fall 2014 Name MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Everything else held constant, an increase in net
AP Macroeconomics 2011 Scoring Guidelines
AP Macroeconomics 2011 Scoring Guidelines The College Board The College Board is a not-for-profit membership association whose mission is to connect students to college success and opportunity. Founded
Chapter 12. Unemployment. covered in the final exam) 12-1 History of Unemployment in the New Zealand. discouraged and underemployed workers.
Chapter 12 13-1 Unemployment (Note: Chapter 12 will not be covered in the final exam) 12-1 History of Unemployment in the New Zealand 13-2 Unemployment rate over time. Recap of definition & issue of discouraged
The Aggregate Demand- Aggregate Supply (AD-AS) Model
The AD-AS Model The Aggregate Demand- Aggregate Supply (AD-AS) Model Chapter 9 The AD-AS Model addresses two deficiencies of the AE Model: No explicit modeling of aggregate supply. Fixed price level. 2
CHAPTER 8. Practise Problems
CHAPTER 8 Practise Problems 1. The labor force is: A) the total of people employed. B) the total population. C) the total of the population of working age. D) the total of people employed and unemployed.
Real Wage and Nominal Price Stickiness in Keynesian Models
Real Wage and Nominal Price Stickiness in Keynesian Models 1. Real wage stickiness and involuntary unemployment 2. Price stickiness 3. Keynesian IS-LM-FE and demand shocks 4. Keynesian SRAS, LRAS, FE and
Chapter 12 Unemployment and Inflation
Chapter 12 Unemployment and Inflation Multiple Choice Questions 1. The origin of the idea of a trade-off between inflation and unemployment was a 1958 article by (a) A.W. Phillips. (b) Edmund Phelps. (c)
Long Run Economic Growth Agenda. Long-run Economic Growth. Long-run Growth Model. Long-run Economic Growth. Determinants of Long-run Growth
Long Run Economic Growth Agenda Long-run economic growth. Determinants of long-run growth. Production functions. Long-run Economic Growth Output is measured by real GDP per capita. This measures our (material)
LECTURE NOTES ON MACROECONOMIC PRINCIPLES
LECTURE NOTES ON MACROECONOMIC PRINCIPLES Peter Ireland Department of Economics Boston College peter.ireland@bc.edu http://www2.bc.edu/peter-ireland/ec132.html Copyright (c) 2013 by Peter Ireland. Redistribution
AP Macroeconomics 2003 Scoring Guidelines Form B
AP Macroeconomics 2003 Scoring Guidelines Form B The materials included in these files are intended for use by AP teachers for course and exam preparation; permission for any other use must be sought from
Macroeconomics, Fall 2007 Exam 3, TTh classes, various versions
Name: _ Days/Times Class Meets: Today s Date: Macroeconomics, Fall 2007 Exam 3, TTh classes, various versions Read these Instructions carefully! You must follow them exactly! I) On your Scantron card you
Aggregate Demand, Aggregate Supply, and the Self-Correcting Economy
Aggregate Demand, Aggregate Supply, and the Self-Correcting Economy The Role of Aggregate Demand & Supply Endogenizing the Price Level Inflation Deflation Price Stability The Aggregate Demand Curve Relates
Microeconomics Topic 6: Be able to explain and calculate average and marginal cost to make production decisions.
Microeconomics Topic 6: Be able to explain and calculate average and marginal cost to make production decisions. Reference: Gregory Mankiw s Principles of Microeconomics, 2 nd edition, Chapter 13. Long-Run
Long run v.s. short run. Introduction. Aggregate Demand and Aggregate Supply. In this chapter, look for the answers to these questions:
33 Aggregate Demand and Aggregate Supply R I N C I L E S O F ECONOMICS FOURTH EDITION N. GREGOR MANKIW Long run v.s. short run Long run growth: what determines long-run output (and the related employment
CHAPTER 7: AGGREGATE DEMAND AND AGGREGATE SUPPLY
CHAPTER 7: AGGREGATE DEMAND AND AGGREGATE SUPPLY Learning goals of this chapter: What forces bring persistent and rapid expansion of real GDP? What causes inflation? Why do we have business cycles? How
AP Macroeconomics 2010 Scoring Guidelines
AP Macroeconomics 2010 Scoring Guidelines The College Board The College Board is a not-for-profit membership association whose mission is to connect students to college success and opportunity. Founded
THE ECONOMY AT FULL EMPLOYMENT. Objectives. Production and Jobs. Objectives. Real GDP and Employment. Real GDP and Employment CHAPTER
THE ECONOMY AT 29 FULL EMPLOYMENT CHAPTER Objectives After studying this chapter, you will able to Describe the relationship between the quantity of labour employed and real GDP Explain what determines
BADM 527, Fall 2013. Midterm Exam 2. Multiple Choice: 3 points each. Answer the questions on the separate bubble sheet. NAME
BADM 527, Fall 2013 Name: Midterm Exam 2 November 7, 2013 Multiple Choice: 3 points each. Answer the questions on the separate bubble sheet. NAME 1. According to classical theory, national income (Real
Agenda. The IS-LM/AD-AS Model: A General Framework for Macroeconomic Analysis, Part 3. Disequilibrium in the AD-AS model
Agenda The IS-LM/AD-AS Model: A General Framework for Macroeconomic Analysis, art 3 rice Adjustment and the Attainment of General Equilibrium 13-1 13-2 General equilibrium in the AD-AS model Disequilibrium
4 Macroeconomics LESSON 6
4 Macroeconomics LESSON 6 Interest Rates and Monetary Policy in the Short Run and the Long Run Introduction and Description This lesson explores the relationship between the nominal interest rate and the
12.1 Introduction. 12.2 The MP Curve: Monetary Policy and the Interest Rates 1/24/2013. Monetary Policy and the Phillips Curve
Chapter 12 Monetary Policy and the Phillips Curve By Charles I. Jones Media Slides Created By Dave Brown Penn State University The short-run model summary: Through the MP curve the nominal interest rate
Chapter 11. Keynesianism: The Macroeconomics of Wage and Price Rigidity. 2008 Pearson Addison-Wesley. All rights reserved
Chapter 11 Keynesianism: The Macroeconomics of Wage and Price Rigidity Chapter Outline Real-Wage Rigidity Price Stickiness Monetary and Fiscal Policy in the Keynesian Model The Keynesian Theory of Business
Chapter 7 Employment and Unemployment Macroeconomics In Context (Goodwin, et al.)
Chapter 7 Employment and Unemployment Macroeconomics In Context (Goodwin, et al.) Chapter Overview This chapter introduces you to standard macro labor topics such the definition of the unemployment rate,
Practiced Questions. Chapter 20
Practiced Questions Chapter 20 1. The model of aggregate demand and aggregate supply a. is different from the model of supply and demand for a particular market, in that we cannot focus on the substitution
ECON 443 Labor Market Analysis Final Exam (07/20/2005)
ECON 443 Labor Market Analysis Final Exam (07/20/2005) I. Multiple-Choice Questions (80%) 1. A compensating wage differential is A) an extra wage that will make all workers willing to accept undesirable
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
Suvey of Macroeconomics, MBA 641 Fall 2006, Final Exam Name MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Modern macroeconomics emerged from
Pre-Test Chapter 10 ed17
Pre-Test Chapter 10 ed17 Multiple Choice Questions 1. Refer to the above diagrams. Assuming a constant price level, an increase in aggregate expenditures from AE 1 to AE 2 would: A. move the economy from
10/7/2013. Chapter 9: Introduction to Economic Fluctuations. Facts about the business cycle. Unemployment. Okun s Law Y Y
Facts about the business cycle Chapter 9: GD growth averages 3 3.5 percent per year over the long run with large fluctuations in the short run. Consumption and investment fluctuate with GD, but consumption
CONCEPT OF MACROECONOMICS
CONCEPT OF MACROECONOMICS Macroeconomics is the branch of economics that studies economic aggregates (grand totals):e.g. the overall level of prices, output and employment in the economy. If you want to
MACROECONOMICS II INFLATION, UNEMPLOYMENT AND THE PHILLIPS CURVE
MACROECONOMICS II INFLATION, UNEMPLOYMENT AND THE 1 Earlier we noted that the goal of macroeconomic policy is to achieve low inflation and low unemployment. This is because having high levels of either,
Analysis of the U.S. labor market is a difficult
Openings and Labor Turnover Job Openings and Labor Turnover New tools for labor market analysis: JOLTS As a single, direct source for data on job openings, hires, and separations, the Job Openings and
Solution. Solution. Monetary Policy. macroeconomics. economics
KrugmanMacro_SM_Ch14.qxp 10/27/05 3:25 PM Page 165 Monetary Policy 1. Go to the FOMC page of the Federal Reserve Board s website (http://www. federalreserve.gov/fomc/) to find the statement issued after
LABOR UNIONS. Appendix. Key Concepts
Appendix LABOR UNION Key Concepts Market Power in the Labor Market A labor union is an organized group of workers that aims to increase wages and influence other job conditions. Craft union a group of
Econ 116 Mid-Term Exam
Econ 116 Mid-Term Exam Part 1 1. True. Large holdings of excess capital and labor are indeed bad news for future investment and employment demand. This is because if firms increase their output, they will
Unemployment and Inflation
Unemployment and Inflation Unemployment Inflation Costs of Unemployment Personal Cost Loss of income Loss of self-esteem Increase in stress related psychological problems Increase in incidence of crime,
Chapter 12. Aggregate Expenditure and Output in the Short Run
Chapter 12. Aggregate Expenditure and Output in the Short Run Instructor: JINKOOK LEE Department of Economics / Texas A&M University ECON 203 502 Principles of Macroeconomics Aggregate Expenditure (AE)
Civilian Human Resources Agency HOW TO FILE FOR UNEMPLOYMENT BENEFITS IF YOU RE A FEDERAL EMPLOYEE
HOW TO FILE FOR UNEMPLOYMENT BENEFITS IF YOU RE A FEDERAL EMPLOYEE UNEMPLOYMENT COMPENSATION FOR FEDERAL EMPLOYEES In general, the law of the state in which your last official duty station in federal civilian
THREE KEY FACTS ABOUT ECONOMIC FLUCTUATIONS
15 In this chapter, look for the answers to these questions: What are economic fluctuations? What are their characteristics? How does the model of demand and explain economic fluctuations? Why does the
Learning Objectives. Chapter 6. Market Structures. Market Structures (cont.) The Two Extremes: Perfect Competition and Pure Monopoly
Chapter 6 The Two Extremes: Perfect Competition and Pure Monopoly Learning Objectives List the four characteristics of a perfectly competitive market. Describe how a perfect competitor makes the decision
Part. Chapter 7 Defining Competitiveness Chapter 8 Designing Pay Levels, Mix, and Pay Structures. External Competitiveness: Determining the Pay Level
Part II External Competitiveness: Determining the Pay Level 7-1 Chapter 7 Defining Competitiveness Chapter 8 Designing Pay Levels, Mix, and Pay Structures 7-2 STRATEGIC POLICIES TECHNIQUES STRATEGIC OBJECTIVES
Practice Questions Week 8 Day 1
Practice Questions Week 8 Day 1 Multiple Choice Identify the choice that best completes the statement or answers the question. 1. The characteristics of a market that influence the behavior of market participants
Economics 101 Multiple Choice Questions for Final Examination Miller
Economics 101 Multiple Choice Questions for Final Examination Miller PLEASE DO NOT WRITE ON THIS EXAMINATION FORM. 1. Which of the following statements is correct? a. Real GDP is the total market value
Lesson 8 - Aggregate Demand and Aggregate Supply
Lesson 8 - Aggregate Demand and Aggregate Supply Acknowledgement: Ed Sexton and Kerry Webb were the primary authors of the material contained in this lesson. Section 1: Aggregate Demand The second macroeconomic
Econ 102 Aggregate Supply and Demand
Econ 102 ggregate Supply and Demand 1. s on previous homework assignments, turn in a news article together with your summary and explanation of why it is relevant to this week s topic, ggregate Supply
Econ 202 Final Exam. Table 3-1 Labor Hours Needed to Make 1 Pound of: Meat Potatoes Farmer 8 2 Rancher 4 5
Econ 202 Final Exam 1. If inflation expectations rise, the short-run Phillips curve shifts a. right, so that at any inflation rate unemployment is higher. b. left, so that at any inflation rate unemployment
Ch.8-Q3. In each of the following situations, what type of unemployment is Melanie facing?
EC 102 Spring 2015 Problem Session #7 (Chapter 8): Ch.8-Q3. In each of the following situations, what type of unemployment is Melanie facing? a. After completing a complex programming project, Melanie
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Firms that survive in the long run are usually those that A) remain small. B) strive for the largest
Inflation and Unemployment CHAPTER 22 THE SHORT-RUN TRADE-OFF 0
22 The Short-Run Trade-off Between Inflation and Unemployment CHAPTER 22 THE SHORT-RUN TRADE-OFF 0 In this chapter, look for the answers to these questions: How are inflation and unemployment related in
THE UNIVERSITY OF AUCKLAND
THE UNIVERSITY OF AUCKLAND FIRST SEMESTER, 2013 Campus: City ECONOMICS Business Economics (Time Allowed: THREE hours) NOTE: Answer ALL questions Total marks = 100 PRACTICE PAPER ONLY This is a practice
Chapter 1. Why Study Money, Banking, and Financial Markets?
Chapter 1 Why Study Money, Banking, and Financial Markets? Why Study Money, Banking, and Financial Markets To examine how financial markets such as bond, stock and foreign exchange markets work To examine
AP Macroeconomics 2012 Scoring Guidelines
AP Macroeconomics 2012 Scoring Guidelines The College Board The College Board is a mission-driven not-for-profit organization that connects students to college success and opportunity. Founded in 1900,
Microeconomics Instructor Miller Practice Problems Labor Market
Microeconomics Instructor Miller Practice Problems Labor Market 1. What is a factor market? A) It is a market where financial instruments are traded. B) It is a market where stocks and bonds are traded.
Answer: C Learning Objective: Money supply Level of Learning: Knowledge Type: Word Problem Source: Unique
1.The aggregate demand curve shows the relationship between inflation and: A) the nominal interest rate. D) the exchange rate. B) the real interest rate. E) short-run equilibrium output. C) the unemployment
Developing and Analyzing Firm-Level Indicators on Productivity and Reallocation
Policy brief 2024 February 2011 John Haltiwanger and Eric Bartelsman Developing and Analyzing Firm-Level Indicators on Productivity and Reallocation In brief Productivity growth is the main driver of long-run
Instructions: Please answer all of the following questions. You are encouraged to work with one another (at your discretion).
Instructions: Please answer all of the following questions. You are encouraged to work with one another (at your discretion). 1. What are the similarities and differences between the characteristics of
Economics 212 Principles of Macroeconomics Study Guide. David L. Kelly
Economics 212 Principles of Macroeconomics Study Guide David L. Kelly Department of Economics University of Miami Box 248126 Coral Gables, FL 33134 dkelly@miami.edu First Version: Spring, 2006 Current
Lecture 9: Keynesian Models
Lecture 9: Keynesian Models Professor Eric Sims University of Notre Dame Fall 2009 Sims (Notre Dame) Keynesian Fall 2009 1 / 23 Keynesian Models The de ning features of RBC models are: Markets clear Money
Employment and Unemployment
Employment and Unemployment A2 Economics, Autumn 2010 Measuring Unemployment A Working Definition of Unemployment People able, available and willing to find work and actively seeking work but not employed
CHAPTER 13 MARKETS FOR LABOR Microeconomics in Context (Goodwin, et al.), 2 nd Edition
CHAPTER 13 MARKETS FOR LABOR Microeconomics in Context (Goodwin, et al.), 2 nd Edition Chapter Summary This chapter deals with supply and demand for labor. You will learn about why the supply curve for
4. The accountant s product costing art
4. The accountant s product costing art How to move from cost pools to product costs Define an appropriate number of cost pools Each cost pool aggregates costs associated with some set of activities Estimate
Introduction to Macroeconomics. TOPIC 1: Introduction, definition, measures
TOPIC 1: Introduction, definitions, measures Annaïg Morin CBS - Department of Economics August 2013 What is macroeconomics about? Understanding the behavior of an economy as a whole. studying aggregated
Tutor2u Economics Essay Plans Summer 2002
Macroeconomics Revision Essay Plan (2): Inflation and Unemployment and Economic Policy (a) Explain why it is considered important to control inflation (20 marks) (b) Discuss how a government s commitment
CHAPTER 8 COSTS OF PRODUCTION
CHAPTER 8 COSTS OF PRODUCTION Chapter in a Nutshell This chapter gives an in-depth look at the costs of production for firms, both in the short run and in the long run. Although production techniques may
CHAPTER 7 THE ANATOMY OF INFLATION AND UNEMPLOYMENT
CHAPTER 7 THE ANATOMY OF INFLATION AND UNEMPLOYMENT Chapter Outline: The sacrifice ratio and Okun's law Variations in unemployment across groups Duration and frequency of unemployment The natural rate
Answers to Text Questions and Problems. Chapter 22. Answers to Review Questions
Answers to Text Questions and Problems Chapter 22 Answers to Review Questions 3. In general, producers of durable goods are affected most by recessions while producers of nondurables (like food) and services
SHORT-RUN PRODUCTION
TRUE OR FALSE STATEMENTS SHORT-RUN PRODUCTION 1. According to the law of diminishing returns, additional units of the labour input increase the total output at a constantly slower rate. 2. In the short-run
Lars Osberg. Department of Economics Dalhousie University 6214 University Avenue Halifax, Nova Scotia B3H 3J5 CANADA Email: Lars.Osberg@dal.
Not Good Enough to be Average? Comments on The Weak Jobs recovery: whatever happened to the great American jobs machine? by Freeman and Rodgers Lars Osberg Department of Economics Dalhousie University
Lecture 3: Intermediate macroeconomics, autumn 2014 Lars Calmfors
Lecture 3: Intermediate macroeconomics, autumn 2014 Lars Calmfors Literature: Mankiw, chapter 7. 1 Topics Causes of unemployment Unemployment and labour market flows Current labour market developments
The value of apprenticeships: Beyond wages
The value of apprenticeships: Beyond wages NIDA BROUGHTON June 2016 There is strong political commitment to the apprenticeships programme as a part of the strategy to achieve a high quality workforce that
Unemployment Insurance Non- Profit Organizations. White Paper
Unemployment Insurance Non- Profit Organizations White Paper October 29, 2013 Copyright 2008-2014. All rights reserved. No part of this document maybe used, distributed, or reproduced in any manner without
CHAPTER 4 Labor Demand Elasticities
CHAPTER 4 Labor Demand Elasticities In addition to the multiple choice problems listed below, complete the following end of chapter questions: Review questions 1,3, 4, 6 and 7. Problems 1, 2, 3 and 5.
Chapter 4. Money, Interest Rates, and Exchange Rates
Chapter 4 Money, Interest Rates, and Exchange Rates Preview What is money? Control of the supply of money The willingness to hold monetary assets A model of real monetary assets and interest rates A model
Eco 201: Group Activity 6 Covers Chap 20 & 21
Eco 201: Group Activity 6 Covers Chap 20 & 21 Chapter 20: 1. 3 RD Edition: p. 455, Quick Quiz Problem 4 th Edition: p. 467, Quick Quiz Problem Figure 2 When a popular presidential candidate is elected,
Agenda. Productivity, Output, and Employment, Part 1. The Production Function. The Production Function. The Production Function. The Demand for Labor
Agenda Productivity, Output, and Employment, Part 1 3-1 3-2 A production function shows how businesses transform factors of production into output of goods and services through the applications of technology.
Aggregate Demand and Aggregate Supply Ing. Mansoor Maitah Ph.D. et Ph.D.
Aggregate Demand and Aggregate Supply Ing. Mansoor Maitah Ph.D. et Ph.D. Aggregate Demand and Aggregate Supply Economic fluctuations, also called business cycles, are movements of GDP away from potential
The Circular Flow of Income and Expenditure
The Circular Flow of Income and Expenditure Imports HOUSEHOLDS Savings Taxation Govt Exp OTHER ECONOMIES GOVERNMENT FINANCIAL INSTITUTIONS Factor Incomes Taxation Govt Exp Consumer Exp Exports FIRMS Capital
Name: Date: 3. Variables that a model tries to explain are called: A. endogenous. B. exogenous. C. market clearing. D. fixed.
Name: Date: 1 A measure of how fast prices are rising is called the: A growth rate of real GDP B inflation rate C unemployment rate D market-clearing rate 2 Compared with a recession, real GDP during a
1. If net capital outflow is positive, then: A. exports must be positive. B. exports must be negative.
1. If net capital outflow is positive, then: A. exports must be positive. B. exports must be negative. C. the trade balance mustbe positive. D. the trade balance mustbe negative. 2. In a small open economy,
III. INTERNATIONAL TRADE
III. INTERNATIONAL TRADE A. Gains from Trade -- a history of thought approach 1. The idea of mercantilism (15-175) argued that a country s well-being is directly tied to the accumulation of gold and silver.