Economics 2nd Edition Daron Acemoglu - Solutions

Unlock the full potential of "Economics 2nd Edition" by Daron Acemoglu with our comprehensive online solutions and answers key. Access a vast collection of solved problems and chapter solutions that guide you through the textbook with ease. Our solution manual and test bank offer step-by-step answers, making complex concepts easy to understand. Whether you're seeking the instructor manual or a free download of solutions in PDF format, our resources are tailored to meet your needs. Explore questions and answers crafted for in-depth learning and academic success.

a Explain why it is important to compare the predictions of a hypothesis with real-world outcomes. b Explain the role of empirical evidence and refutation in the scientific method.
Distinguish between hypotheses, theories, laws and models.
Explain the scientific method. Outline the steps it involves.
The relationships between hypotheses, theories, laws and models described here apply generally to all the social sciences and sciences based on the scientific method. Yet they may differ between disciplines in the ways they are used and interpreted. As you study economics, you may want to think
Explain the importance of making a distinction between positive and normative statements in economics.
Which of the following are positive statements and which are normative? a It is raining today. b It is too humid today. C Economics is a study of choices. d Economics should be concerned with how to reduce poverty. e If household saving increases, there will be a fall in household spending. f
Using the production possibilities model, explain the relationship between scarcity, choice and opportunity cost.
Using diagrams, distinguish between increasing and constant opportunity costs.
Use the production possibilities curve model and diagrams to show how the following can result in actual growth or growth (or decrease) in production possibilities: a a discovery of new oil reserves b firms hire more workers a vaccine for contagious diseases is invented d firms improve how they
Say an economy is initially at point F producing 15 microwave ovens and 12 computers (Figure 1.1). State what would be the opportunity cost of moving to a point on the production possibilities curve, such as point C, where it would be producing 26 microwave ovens and 25 computers. a Using
Distinguish between output actually produced and output on the PPC. b Outline why an economy's actual output is most likely to be located somewhere inside its PPC
Use the concept of opportunity cost to explain why the following two statements have the same meaning: a efficiency in production means producing by use of the fewest possible resources b efficiency in production means producing at the lowest possible cost.
Consider the production possibilities data in Table 1.2 and Figure 1.1. If the economy is initially at point A and moves to point B. computer production will increase by 17 units. a Calculate the opportunity cost of the increase in computer production.b. If the economy moves from D to C. calculate
Outline why most economies in the world today are mixed market economies.
Describe examples of command practices in mixed economies.
a Define and explain the difference between price rationing and non-price rationing. b Describe the functions of these two rationing mechanisms. C Identify the kind of economic system in which each one predominates.
Compare and contrast the methods by which allocation and distribution choices are made in the market economy and the command economy.
Outline why the command economy is also referred to as a centrally planned economy.
Use the criteria appearing in Table 1.1 to compare and contrast the main characteristics of the market and command economies.
Identify the basic economic questions that must be answered by a free market economies, b command economies, and C mixed economies.
Outline the main source of the disagreement between those who argue there should be little government intervention in the economy and those who argue that government intervention should be more extensive.
Identify some more examples of command methods (government intervention) in market economies.
Why do you think free goods are rare?
Identify which of the following goods are 'free goods' and explain why: a public parks b sand in the Sahara desert c garbage collection d free health care services e wildlife.
Explain the difference between a free good and an economic good.
Think of three choices you have made during the past week and describe the opportunity cost of each one.
Explain how scarcity and choice relate to opportunity cost.
Define opportunity cost.
a Identify the various meanings of the term 'capital'. b Outline what they have in common.
Describe why entrepreneurship is considered to be a factor of production separate from labour.
Outline how physical capital differs from the other three factors of production.
a Outline why resources are also called 'factors of production'. b Identify the four factors of production.
years. The population of Delhi faces an average loss of 10.2 years. The public is outraged. The government has begun to respond to this public health emergency'. a Research an example of a challenge India faces and outline how it is a threat to sustainable development. b Describe how India's rapid
Consider the following: 'Dangerous levels of industrial air pollution in India reduce life expectancy by seven years for 40% of its population. This refers to the people living in the states of the Indo-Gangetic plain, where pollution has increased by 72% in a period of
Explain the relationship between scarcity and sustainability.
Explain why diamonds are far more expensive than water, even though diamonds are a luxury while water is a necessity without which we cannot live.
Outline why economics is a study of choices. Describe its relationship to scarcity. Outline how scarcity is related to the need to avoid waste in the use of resources.
Think of some of your most important needs and wants, and then explain whether these are satisfied by goods or by services.
Sometimes countries abandon their own currency entirely and adopt the currency of another country. For example, Ecuador adopted the U.S. dollar in 2000; El Salvador did the same in 2001. Indeed, because countries often choose the U.S. dollar, this strategy is called “dollarization.”Based on the
Recall the discussion in “Letting the Data Speak” regarding the Chinese yuan. Why did the Chinese authorities keep the yuan undervalued until the end of 2016?At the beginning of 2014 1 USD was valued roughly at 6.05 yuan, while by the end of 2016 1 USD was valued at 6.95 yuan, since then it has
You may have seen the term “capital flight” in news articles about developing countries. Capital flight occurs when foreign investors, often spooked by political instability, lose confidence in a country’s assets and decide to sell them. This phenomenon is particularly concerning to the many
Thailand and Taiwan are both rapidly growing Asian economies that trade actively with other countries.a. Suppose a computer circuit board is the only good produced in Thailand and Taiwan. The circuit board costs 100 baht in Thailand and 200 NT (New Taiwan dollars) in Taiwan. The nominal exchange
Since 2008, the dollar has appreciated against the euro.a. Suppose that in the short run, the Fed wanted both to weaken the dollar (that is, stop its appreciation and/or cause it to depreciate) and stimulate investment. Based on what you have learned in this chapter and in Chapter 27, discuss
The graph below shows the Hungarian forint (HUF) per U.S. dollar (USD) exchange rate between 2008 and 2017.The table that follows shows the real interest rates in these two countries during the same period.
Challenge Problem: The beautiful, mythical country of Coloradial uses the teo as its currency, and the gritty, post-industrial country of Oheo uses the eren. Exactly 1 year ago, you could get 100 teos in exchange for 5 erens in the foreign exchange market. Since then, though, the real interest rate
Econia trades with its neighbors, the countries of Governmentia and Sociologia. In Econia, the currency is called the econ; in Governmentia, the currency is called the gov; and in Sociologia, the currency is the soc. Nominal exchange rates are:200 econs = 1 gov, 4 socs = 1 gov, 100 econs = 1 soc.A
Using the net exports curve and the labor demand and labor supply curve, explain how a fall in the real exchange rate can lead to an increase in employment in a country.
The Evidence-Based Economics feature in the chapter discusses how George Soros’s hedge fund made money by betting on the devaluation of the British pound. Interestingly, Soros also made money betting against the Thai baht. In 1997, the baht had been continually falling against the U.S. dollar.
In 2011, the government of Argentina developed a new policy (sometimes called the “dollar clamp”) to prevent Argentines from exchanging pesos, the local currency, for U.S. dollars. New restrictions hampered currency exchange: for example, buying dollars required advance approval from the
Recall from Chapter 20 that the Big Mac index is used as a rough measure of purchasing power parity across countries. The Economist magazine recently included the Vietnamese dong in its calculation of the Big Mac index. A Big Mac costs $5.06 in the United States but only 60,368 dong or $2.66 in
Suppose that the European Union follows a flexible exchange rate regime. The exchange rate between the euro(EUR) and the U.S. dollar (USD) is currently 1 EUR =1.17 USD.a. Use a graph to show the equilibrium in the foreign exchange market with the U.S.-dollar-per-euro exchange rate on the vertical
The economy of Freedonia is currently faced with negative net exports and high unemployment. Explain two measures that the Freedonian central bank could take to increase net exports and lower unemployment.
All else being equal, explain how an increase in the real interest rate is likely to affect a country’s net exports, labor demand, and level of employment.
How does a change in a country’s real exchange rate affect its net exports?
How is the real exchange rate for the United States calculated?
How did George Soros exploit the overvaluation of the British pound?
Why might a country peg its exchange rate at a level that overvalues its own currency?
What does it mean to say that, at an exchange rate of $1 =60 INR, the U.S. dollar is overvalued and the Indian rupee(INR) is undervalued?
What does the supply curve for dollars show? Why does the supply curve for dollars slope upward?
What does the demand curve for dollars show? Why does the demand curve for dollars slope downward?
Distinguish among flexible, fixed, and managed exchange rates.
When is a currency said to appreciate or depreciate?
How is the nominal exchange rate between two currencies defined?
The coffee market is one of the most globalized and volatile commodity markets in existence. In terms of the value of trade, it is second only to oil. Coffee is produced in over seventy countries, primarily lower-income nations in Latin America, Africa, and Asia. In recent years, a movement has
Foreign direct investment in several sectors in India is still heavily regulated. After much debate, the government of India recently relaxed restrictions on foreign direct investment in the retail sector. Purportedly for reasons like national security and possible job losses, many sectors of the
Throughout the 1950s and 1960s, many poor countries pursued a policy called “import-substituting industrialization,” or ISI for short. India, and many nations in Africa and Latin America, closed themselves off to trade in order to promote the development of domestic industries. As noted in the
In the fourth quarter of 2016, the U.S. current account deficit was $112.4 billion, while the trade deficit was $132.3 billion.a. Why are the trade deficit and the current account deficit different?b. Based on the information in this problem, what were U.S. net capital outflows in 2016? Carefully
Suppose the following table shows data on transactions between Hungary and the rest of the world for the second quarter of 2017. Assuming the list is exhaustive, use the information given to fill in the table showing the current and financial accounts for the second quarter of 2017.(All amounts in
During the 2016 election, Donald Trump argued that China was exploiting the United States. In particular, he decried the large trade deficit with China—in debates, he liked to say that China was “killing” the United States on trade. Is having a trade deficit with another country inherently
The United States has maintained a free trade policy since World War II. However, since the election of President Trump, there is growing discourse that tariffs should be imposed to save American industries and jobs. According to CNBC, in 2015, China was the United States’ largest import partner
David Ricardo, the British political economist, used the example of two commodities—wine and cloth—produced by England and Portugal to explain trade.The following table shows the number of labor hours it would take England and Portugal to produce one unit each of wine and cloth:Portugal England
Are multinational companies harming factory workers in the developing world by hiring them at low wages?b. For the United States, what is the opportunity cost of producing a car? What is the opportunity cost of producing a ton of wheat?c. For Germany, what is the opportunity cost of producing a
What is foreign direct investment? Explain with an example. How does foreign direct investment benefit the recipient country?
What are net capital outflows? Use an example to explain how they are related to net exports.
What is included in a country’s financial account? How is the financial account related to the current account?
What does the current account include? Describe each of its components. Are all of these components included in GDP? Explain.
List the sources of income-based payments that domestic residents make to foreigners and the ways that domestic residents can receive income-based payments from foreigners.
Use the information below to answer the questions that follow.Production per Unit of Labor United States Germany Wheat (tons) 120 200 Car 200 400a. Which country has the absolute advantage in producing cars? In producing wheat?Select problems are available in Pearson MyLab Economics for practice
Suppose that United States and India are the only two countries in the world. Suppose also that in India, an acre of land can produce 40 tons of sugarcane or 65 bushes of corn per season, while in the United States, an acre of land can produce 20 tons of sugarcane or 150 bushels of corn per
You and your roommate are enrolled in the same course:Postmodern Deconstruction of Postmodern Deconstructionism. The course requires a term paper. Since the professor encourages collaboration on the paper, you decide to work on it together, “trading” tasks. In 8 hours, you can type eighteen
The economist Alan Blinder said that any economist who mows his own lawn probably has not understood the concept of comparative advantage. Would you agree with Professor Blinder?
Are multinational companies harming factory workers in the developing world by hiring them at low wages?
What is foreign direct investment? Explain with an example. How does foreign direct investment benefit the recipient country?
What are net capital outflows? Use an example to explain how they are related to net exports.
What is included in a country’s financial account? How is the financial account related to the current account?
What does the current account include? Describe each of its components. Are all of these components included in GDP? Explain.
List the sources of income-based payments that domestic residents make to foreigners and the ways that domestic residents can receive income-based payments from foreigners.
The international accounting system maintains a clear distinction between residency and citizenship.a. Who would be considered a domestic resident of the United States, according to the international accounting system?b. Suppose a U.S. citizen lives and works in Nigeria.Would he be considered a
Why is it a problem if a country is running a current account deficit? How can this be balanced out?
Has trade been increasing or decreasing over the past few decades? What could explain why the ratio of imports to GDP in the United States fell sharply after 1929 before rebounding shortly thereafter?
Explain the following terms:a. Open economyb. Closed economyc. Importsd. Exportse. Tariffs
Engaging in trade increases overall economic efficiency.Does this also imply that everyone in an economy gains from trade equally?
How does trade allow buyers and sellers to exploit gains from specialization?
How does comparative advantage differ from absolute advantage?
Challenge Problem. Assume that the public in the small country of Sylvania does not hold any cash. Commercial banks, however, hold 5 percent of the public’s checking deposits as excess reserves, regardless of the interest rate.In the questions that follow, use the “money multiplier”equation
Challenge Problem. The chapter mentions that an open market operation by the Fed can increase or decrease the quantity of deposits in banks and therefore the money supply. (See, for example, Exhibit 27.8.)The expansion in the money supply from a Fed open market operation is given by the following
The European Central Bank (ECB) manages monetary policy for the eurozone. Following the financial crisis of 2007–2008, the ECB, like the Fed, lowered interest rates to around zero.a. Using the concept of the zero lower bound, explain how low interest rates could constrain countercyclical monetary
Milton Friedman, the renowned monetary economist, gave the following analogy about the Fed.“Imagine your house is being heated by a heater. The heater is controlled by a thermostat. The way it’s set up, when the house gets a little too warm, the thermostat turns off the heater; if it gets too
According to the article Politics and investment: Examining the territorial allocation of public investment in Greece, in the 34 years before the 2008 financial crisis, public expenditure in various constituencies in Greece was closely correlated with electoral results. The regions that voted a
Two economists estimate the government expenditure multiplier and come up with different results. One estimates the multiplier at 0.75, while the other comes up with an estimate of 1.25.a. What do these different estimates imply about the consequences of government expenditure?b. If the current

Showing 500 - 600 of 1798

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Last

Economics 2nd Edition Daron Acemoglu - Solutions

Step by Step Answers