Economic Principles And Problems A Pluralist Introduction 1st Edition Geoffrey Schneider - Solutions

Using Figure 32.2, explain why a supply shock presents a difficult conundrum for policymakers, forcing them to choose between fighting inflation and fighting unemployment. How are supply-side policies designed to resolve this conundrum?
According to political economists, what are the major factors that can reduce the profit rate and lead to a recession? Explain each one briefly.
Explain the Keynesian idea that the patterns in business investment purchases drive the business cycle.
You have just been appointed the new chair of the Federal Reserve Bank. The President wants your immediate input on (a) how best to regulate banks and financial markets and (b) the best monetary policy to use given the current state of the economy. Write an essay in which you take up these key
Explain the perspectives of hawks, doves, and owls on expansionary monetary policy and its relationship to inflation. Which perspective do you find most compelling? Why?
In your own words, define the NAIRU theory. Explain the different perspectives on NAIRU.
Figure 31.5 shows the economy in an overheated state at point a.a. How large is the inflationary gap?b. What policies can the Fed use to cause a decrease in aggregate demand?Explain.c. If the marginal respending rate is 0.8, how large a decrease in investment and consumption would it take to move
What is quantitative easing, and how can it help to stimulate the economy?
What happens to banks, the money supply, and interest rates if the Fed engages in an open market purchase?
List the Fed’s monetary policy tools. Explain how the Fed could use each policy tool to reduce the money supply and increase interest rates.
How has the regulation of banks and financial markets changed over the course of U.S. history?
In your own words, define the term “financialization.” Why do political economists see financialization as a problem? Why do laissez-faire and supply-side economists disagree?
According to the political economy theory of endogenous money, which of the following are true (select one or more options)?a. The Fed determines the money supply.b. The Fed sets the rate of interest.c. Money demand determines the rate of interest.d. Banks create money by making new loans and later
What are the main differences between the mainstream model of the money market and the political economy model of the money market? Why does it matter if the money supply is exogenous or endogenous?
How would each of the following factors affect the money market according to mainstream economists?a. A major recession causes real GDP to fall significantly.b. Inflation occurs due to an increase in oil and other energy prices.c. Investors expect a major economic boom.d. The central bank decreases
Explain the slope of the money demand curve in the mainstream model of the money market. Why is it downward sloping? Why does it get flatter as interest rates approach 0%?
Why do economists consider the interest rate to be the opportunity cost of holding your money as cash?
Explain why banks rarely hold excess reserves. What might prompt a bank to hold excess reserves?
How is the money multiplier related to the required reserve ratio? Explain briefly. What factors would cause the money multiplier to be larger? What factors would cause the money multiplier to be smaller?
Why will a government-issued form of money always be safer to hold than a cryptocurrency such as Bitcoin?
Explain why the gold standard and commodity money fell out of fashion and why modern economists prefer fiat money.
Describe the fiscal policies used to stabilize the economies of the United States and the euro area during the Great Recession of 2008. Were the policies effective?Why or why not? How did developed countries change their policies to combat the COVID-19 recession of 2020?
Explain Stephanie Kelton’s argument that the government should not worry about large government budget deficits except under certain conditions. What are some criticisms of this approach?
Critically evaluate the different perspectives of economists on government budget deficits and debt. What are the main areas of disagreement? How do you think the government should approach the issue of deficit spending?Explain and support your answer.
Describe what has happened to U.S. budget deficits and the national debt of the federal government over the last 50 years.
Compare and contrast the different perspectives of economists on fiscal policy.Which perspective do you find most convincing? Why?
Use Figure 29.18 to answer the following questions. Suppose the economy is currently in equilibrium where AD2 intersects AS.a. What is the amount of the recessionary or inflationary gap?b. If the marginal respending rate is 0.8, how much will the government need to change spending to move the
Use Figure 29.18 to answer the following questions. Suppose the economy is currently in equilibrium where AD1 intersects AS.a. What is the amount of the recessionary or inflationary gap?b. If the marginal respending rate (MRR) is 0.6, how much will the government need to change spending to move the
Explain the difference between automatic stabilizers and discretionary fiscal policy. Give examples in your answer.
Describe the priorities that emerge from role and size of the U.S. government.What does the United States prioritize? How do U.S. priorities differ from those in other developed countries?
Using Figure 28.13 (which connects AE to AD), explain what impact a decrease in prices would have on aggregate demand and aggregate expenditure according to mainstream economists. How would political economists respond to this analysis?
Suppose that potential real GDP (YP) in Figure 28.16 is $12,000 billion and that the current aggregate expenditure curve is AE1.a. How large is the inflationary or recessionary gap?b. How much would the government need to change government spending to move the economy from its current equilibrium
Which of the following will cause the slope of the aggregate expenditure curve to decrease? Select one or more of the following and explain your answer briefly.a. A decrease in autonomous consumption expenditures.b. A decrease in the marginal propensity to consume.c. A decrease in the tax rate.d. A
Use Figure 28.16 to answer the questions below.a. What is the equilibrium level of real GDP in Figure 28.16?b. What is the marginal respending rate in Figure 28.16? What is the equation for AE1?c. Why is it impossible for $12,000 billion to be the equilibrium level of real GDP with aggregate
Use Figure 28.15 to answer the questions below. In this case, t = 0.25, MPC =0.8, investment is autonomous, government spending is autonomous, exports are autonomous and equal to 200, and the MPM is 0.1.a. Complete the table.b. Determine the equilibrium level of Y and AE.c. What is the equation for
Use Figure 28.14 to answer the following questions.a. What is the tax rate?b. What is autonomous consumption?c. What is the marginal propensity to consume?d. What is savings when Y = 4000 and Y = 6000?e. If the tax rate increased to 50%, what would consumption be when Y =1000? Y DI 0 600 1000 750
Explain the political economy critique of the aggregate demand–aggregate supply model.
(a) Draw a graph showing the economy in a recession. Include AD, AS, and potential real GDP on your graph. Show what will happen in the long run according to the classical model and explain your answer in words. (b) Discuss why Keynes disagrees with the assumptions of the classical model and what
Draw a graph showing an overheated economy. Include AD, AS, and potential real GDP on your graph.a. Show what will happen in the long run according to the classical model and explain your answer in words.b. What would Keynes like to see done in this case? Explain carefully.
Suppose real GDP falls below potential real GDP temporarily due to a decline in consumer spending (C), which also has the effect of increasing the pool of savings in banks.a. What does the classical model predict will happen to investment (purchases of capital goods) and aggregate demand in
If the MRR = 0.75 and the MPC = 0.9, a $1000 billion tax cut will cause a change in aggregate demand of $_______ billion. Explain and show your work.
Use Figure 27.15 to answer the following questions:a. If the MRR = 0.6 and there is an increase in government spending of $1000 billion, then the aggregate demand curve will shift by $______ billion. We can expect the new price index to be _______ and the new real GDP to be $_______.b. If the MRR =
In 2010, the economy was at a real GDP of $12,000 billion and a price index of 101 (2009 = 100). Potential real GDP was estimated to be $13,500 billion.Due to the difficulty in gaining bipartisan agreement on the fiscal budget, the government shut down. As a result of the government shutdown,
In each of the examples below, indicate what happens to aggregate demand, aggregate supply, the price level, and real GDP in the short run.a. The government cuts income taxes.b. A new, sophisticated robot is invented that dramatically reduces businesses’costs of production but that also causes
(a) Briefly explain why the aggregate demand curve has a negative slope in the standard AD–AS model. (b) Briefly explain the shape of the aggregate supply curve.
According to the Phillips curve, if the economy experiences a rapid economic boom, what can we expect to happen? What are the potential problems with the analysis of the Phillips curve?
According to the quantity theory of money and the equation of exchange, what will happen to the economy when the money supply is increased by 20%(as it was in 2020), assuming that the assumptions behind the theory hold?What are the potential problems with this approach?
According to political economists, which groups benefit most from a low inflation, high unemployment economy, and which groups benefit from a high inflation, low unemployment economy?
List the major problems created by inflation. Which of these do you think is most problematic? Why? How can inflation be solved?
List the major problems created by deflation. Which of these do you think is most problematic? Why? How can deflation be solved?
Which of the following statements about inflation are true (select one or more)?Explain each answer briefly.a. Inflation is worse than deflation because deflation is good for businesses.b. Inflation helps lenders because it leads to higher interest rates.c. Worries about inflation usually cause the
List the major programs that are used to reduce the levels and impact of unemployment.Which policies do you think are most effective? Why?
Why do many economists find the unemployment rate to be problematic in terms of representing how well workers are doing? Explain carefully.
(a) Define each of the three major types of unemployment in your own words and come up with at least one specific example for each type. Do not use examples from the book. (b) Explain which type of unemployment you believe to be most harmful to the economy and why.
List the major costs that result from unemployment to individuals, families, communities, and the macroeconomy.
What do you think is most important to the well-being of most people? Explain and support your position. Which measure of economic welfare would best capture well-being as you have defined it? Do you think others would agree with your determination of well-being?
Write an essay in which you compare, contrast, and critically evaluate real GDP, the Better Life Index, and the genuine progress indicator. Make an argument for which measure should be used as the best barometer of a country’s well-being.
Why does the United States perform relatively well when it comes to real GDP per capita but relatively poorly when it comes to the other measures discussed in this chapter? If the United States wanted to change its performance with respect to the Better Life Index and the genuine progress
Determine which indexes are most closely associated with each characteristic listed in Figure 25.13. Characteristic An exclusive focus on income Contains no subjective measures Ranks countries based on a set of key indicators Subtracts economic "bads" Includes education and housing as key
How is the World Happiness Index constructed, and how does it compare to real GDP, the Better Life Index, and the genuine progress indicator?
Explain how the genuine progress indicator is constructed and how it differs from real GDP and the Better Life Index.
Do you think the Better Life Index is a better measure of economic well-being than real GDP? Why or why not? What are the strengths and weaknesses of the Better Life Index?
List and explain the main limitations of real GDP as a measure of well-being.
Using the circular flow model, explain why total spending (aggregate demand)tends to be equal to total income.
In 2017, U.S. nominal GDP was $19,519 billion and U.S. real GDP (measured in 2012 dollars) was $18,108 billion. Explain the difference between these two measures of 2017 GDP and use these numbers to determine how much inflation there was from 2012 to 2017.
Describe the different dimensions of sustainability and explain why each dimension is important.
Describe the different approaches to macroeconomic policy with respect to business cycles. Which approach do you find most compelling? Why?
What are the major patterns economists have identified in the modern business cycle?
Describe the efficient market hypothesis in your own words. How did this hypothesis contribute to policies to deregulate financial markets? What were some of the results of the deregulation of financial markets?
What is stagflation, and why did it prove to be difficult for mainstream Keynesian economists to cope with in the 1970s?
Define each of the following economic concepts in your own words and briefly explain why the concept is important.a. Real GDP.b. Real GDP per capita.c. Unemployment rate.d. Labor force participation rate.e. Inflation rate.
Describe the evolution of post-World War II macroeconomic thinking as it relates to changes in global economies. What ideas dominated during Pax Americana? How did these ideas change with the advent of stagflation and the beginnings of neoliberal globalization? What did economists learn from the
How did Keynes demonstrate that Say’s law would not hold in recessions and that the market would not self-correct?
List the key goals economists have identified for a macroeconomic system.Which do you think is most important? Why?
Why do feminist economists and stratification economists focus on culture as a key determinant of gender and racial inequality? Explain and give examples.
Describe the degree of racial and gender inequality that exists in the modern United States. What factors explain the ongoing existence of this inequality?What could be done to reduce this type of inequality?
Given the information in this chapter on racial inequality, how do you think colleges should make decisions about which students to admit?
Write an essay in which you explore the consequences of social class divisions in the modern United States. What, if anything, do you think the U.S. government should do to address social class inequality? Explain and support your answer.
What is personal capital, and how does this concept help us to understand why some people are more successful than others?
Why is class correlated with inequality?
List the most important factors that economists believe are contributing to inequality in the modern world.
Brazil’s Gini coefficient fell from 63.3 in 1989 to 51.5 in 2014. What does this tell us about inequality in Brazil? Explain carefully.
What are the main reasons why U.S. inequality has worsened more than inequality in other developed countries?
Describe how inequality has changed in the United States and other developed countries since 1970.
Figure 22.19 depicts hypothetical information for a firm.a. Is this firm a monopsony? Why or why not?b. Is this firm a monopoly? Why or why not?c. Complete the table.d. Determine the optimal quantity of laborers for this firm to hire.e. Use a spreadsheet program to plot out a graph of the demand
What are the main arguments of opponents of the minimum wage? What are the main arguments of supporters of the minimum wage? Which arguments do you find most convincing?
Using Figure 22.9 as your starting point, with a minimum wage of W2 in place, analyze how each of the following events will affect the demand and supply curves for unskilled labor, the number of laborers hired by firms, and the amount of surplus labor that exists.a. The economy booms and the demand
Use the political economy model of the working day to determine how each of the following events would impact wages and the rate of profit.a. The government increases the minimum wage.b. The government reduces the maximum number of work hours allowed per week from 40 to 35.c. New robots are
Workers in the United States are paid considerably less than workers in Germany. Using the political economy approach to the labor market, analyze why this is the case.
List the major sources of power in the relationship between workers and owners.Which of these do you think is most important? Why?
Compare and contrast the stick approach to worker motivation with the carrot approach. How can either approach be profitable for firms operating in the same industry (e.g., Wegmans vs. Walmart)?
List the major sources of conflict between workers and owners. Which of these sources of conflict do you think is most pervasive in white-collar work such as investment banking? Which sources of conflict might be most pervasive in blue-collar work in an Amazon warehouse?
Given the trends described in this chapter regarding the skills employees need and the industries that are expanding and contracting, what course of study makes the most sense for you? How can you leverage your strengths into a skill set that employers would value?
Given the importance of education in developing human capital and fostering economic growth, how would you reform the U.S. education system? Explain and support your answer.
How does the U.S. education system compare with those of other developed countries? Explain briefly. 69 $ MPB A MSB B D E MC
Should the United States adopt a single-payer health care system? Explain and support your answer.
Compare and contrast the U.S. health care system with those of other developed countries. In what ways does the U.S. system stand out?
Write a short essay in which you contrast the analysis of public goods by (a)mainstream economists, (b) progressive political economist John Kenneth Galbraith, and (c) Austrian economist Murray Rothbard. Which approach do you find most convincing? Why?
Explain why privatization was effective in providing train service in Britain but not effective in providing the infrastructure for train service (the train tracks).
Using the graph in Figure 21.9, answer the following questions:a. Which point represents the socially efficient equilibrium?b. Which point represents the private market equilibrium?c. What distance on the graph would represent the lost social benefits from producing at the private market

Showing 400 - 500 of 1190

Economic Principles And Problems A Pluralist Introduction 1st Edition Geoffrey Schneider - Solutions

Step by Step Answers