大学宏观经济学第三版英文答案chapter 33.docx

1、大学宏观经济学第三版英文答案chapter 3320XX年复习资料大学复习资料专 业： 班 级： 科目老师： 日 期： SOLUTIONS TO TEXT PROBLEMS:Quick Quizzes1. Three key facts about economic fluctuations are: (1) economic fluctuations are irregular and unpredictable; (2) most macroeconomic quantities fluctuate together; and (3) as output falls, unemployme

2、nt rises. Economic fluctuations are irregular and unpredictable, as you can see by looking at a graph of real GDP over time. Some recessions are close together and others are far apart. There appears to be no recurring pattern. Most macroeconomic quantities fluctuate together. In recessions, real GD

3、P, consumer spending, investment spending, corporate profits, and other macroeconomic variables decline or grow much more slowly than during economic expansions. However, the variables fluctuate by different amounts over the business cycle, with investment varying much more than other variables.As o

4、utput falls, unemployment rises, because when firms want to produce less, they do so by laying off workers, thus causing a rise in unemployment.2. The economys behavior in the short run differs from its behavior in the long run because the assumption of monetary neutrality applies to the long run, n

5、ot the short run. In the short run, real and nominal variables are highly intertwined. Figure 1 shows the model of aggregate demand and aggregate supply. The horizontal axis shows the quantity of output and the vertical axis shows the price level.Figure 13. The aggregate-demand curve slopes downward

6、 for three reasons. First, when prices fall, the value of dollars in peoples wallets and bank accounts rises, so they are wealthier. As a result, they spend more, so aggregate demand increases. Second, when prices fall, people need less money to make their purchases, so they lend more out, which red

7、uces the interest rate. The lower interest rate encourages businesses to invest more, raising aggregate demand. Third, since lower prices lead to a lower interest rate, investors move money from domestic investment to foreign investment, supplying dollars to the foreign-exchange market, thus causing

8、 the dollar to depreciate. The decline in the real exchange rate causes net exports to increase, which raises aggregate demand. Any event that alters the level of consumption, investment, government purchases, or net exports at any price level will lead to a shift in aggregate demand. An increase in

9、 expenditure will shift the aggregate demand curve to the right, while a decline in expenditure will shift the aggregate demand curve to the left.4. The long-run aggregate-supply curve is vertical because the price level does not affect the long-run determinants of real GDP, which include supplies o

10、f labor, capital, natural resources, and the level of available technology. This is just an application of the classical dichotomy and monetary neutrality. There are three reasons why the short-run aggregate-supply curve slopes upward. First, the sticky-wage theory suggests that because nominal wage

11、s are slow to adjust, a decline in the price level means real wages are higher, so firms hire fewer workers and produce less, causing aggregate supply to decline. Second, the sticky-price theory suggests that the prices of some goods and services are slow to change. Then, if some economic event caus

12、es the overall price level to decline, prices that are sticky wont be able to adjust immediately, so relative prices of those goods will rise and the demand for those goods will decline, leading firms to cut back on production. Thus, lower overall prices lead to lower aggregate supply. Third, the mi

13、sperceptions theory suggests that changes in the overall price level can temporarily mislead suppliers. When the price level falls below the level that was expected, suppliers think that the relative prices of their products have declined, so they produce less. Thus, a lower price level reduces aggr

14、egate supply.Figure 25. When a popular presidential candidate is elected, causing people to be more confident about the future, they will spend more, causing the aggregate-demand curve to shift to the right, as shown in Figure 2. The economy begins at point A with aggregate-demand curve AD1 and shor

15、t-run aggregate-supply curve AS1. The equilibrium has price level P1 and output level Y1. Increased confidence about the future causes the aggregate-demand curve to shift to AD2. Now the economy is at point B, with price level P2 and output level Y2. Over time, the short-run aggregate-supply curve s

16、hifts up to AS2 and the economy gets to equilibrium at point C, with price level P3 and output level Y1. Questions for Review1. Two macroeconomic variables that decline when the economy goes into a recession are real GDP and investment spending (many other answers are possible). A macroeconomic vari

17、able that rises during a recession is the unemployment rate.2. Figure 3 shows aggregate demand, short-run aggregate supply, and long-run aggregate supply.Figure 33. The aggregate-demand curve is downward sloping because: (1) a decrease in the price level makes consumers feel wealthier, which in turn

18、 encourages them to spend more, so there is a larger quantity of goods and services demanded; (2) a lower price level reduces the interest rate, encouraging greater spending on investment, so there is a larger quantity of goods and services demanded; (3) a fall in the U.S. price level causes U.S. in

19、terest rates to fall, so the real exchange rate depreciates, stimulating U.S. net exports, so there is a larger quantity of goods and services demanded.4. The long-run aggregate supply curve is vertical because in the long run, an economys supply of goods and services depends on its supplies of capi

20、tal, labor, and natural resources and on the available production technology used to turn these resources into goods and services. The price level does not affect these long-run determinants of real GDP.5. Three theories explain why the short-run aggregate-supply curve is upward sloping: (1) the sti

21、cky-wage theory, in which a lower price level makes employment and production less profitable because wages do not adjust immediately to the price level, so firms reduce the quantity of goods and services supplied; (2) the sticky-price theory, in which an unexpected fall in the price level leaves so

22、me firms with higher-than-desired prices because not all prices adjust instantly to changing conditions, which depresses sales and induces firms to reduce the quantity of goods and services they produce; and (3) the misperceptions theory, in which a lower price level causes misperceptions about rela

23、tive prices, and these misperceptions induce suppliers to respond to the lower price level by decreasing the quantity of goods and services supplied.6. The aggregate-demand curve might shift to the left when something (other than a rise in the price level) causes a reduction in consumption spending

24、(such as a desire for increased saving), a reduction in investment spending (such as increased taxes on the returns to investment), decreased government spending (such as a cutback in defense spending), or reduced net exports (such as when foreign economies go into recession, so our exports fall.Fig

25、ure 4 traces through the steps of such a shift in aggregate demand. The economy begins in equilibrium, with short-run aggregate supply, AS1, intersecting aggregate demand, AD1, at point A. When the aggregate-demand curve shifts to the left to AD2, the economy moves from point A to point B, reducing

26、the price level and the quantity of output. Over time, people adjust their perceptions, wages, and prices, shifting the short-run aggregate-supply curve down to AS2, and moving the economy from point B to point C, which is back on the long-run aggregate supply curve and has a lower price level.Figur

27、e 47. The aggregate-supply curve might shift to the left because of a decline in the economys capital stock, labor supply, or productivity, or an increase in the natural rate of unemployment, all of which shift both the long-run and short-run aggregate supply curves to the left. An increase in the e

28、xpected price level shifts just the short-run aggregate-supply curve (not the long-run aggregate-supply curve) to the left.Figure 5 traces through the effects of such a shift. The economy starts in equilibrium at point A. The aggregate-supply curve then shifts to the left from AS1 to AS2. The new eq

29、uilibrium is at point B, the intersection of the aggregate-demand curve and AS2. As time goes on, the economy returns to long-run equilibrium at point A, as the short-run aggregate supply curve shifts back to its original position.Figure 5Problems and Applications1. Investment is more variable than

30、consumer spending over the business cycle because firms can curtail investment spending more easily than households can curtail consumption spending. In recessions, firms know they will not be able to sell as many goods, so they want to produce less and therefore they put off buying capital (they do

31、 not expand factories or buy new equipment). Much of consumer spending is on necessities, like food, which cannot decline as much in recessions. So, investment spending is more variable over the business cycle than consumer spending. For similar reasons, durable goods spending is the most volatile s

32、ector of consumer spending. Durable goods, such as furniture and car purchases, are more volatile over the business cycle than nondurable goods, such as food and clothing, or services, such as haircuts and medical care, for the same reason. People put off buying durable goods and just make do with older cars and furniture when economic times are bad.2. a. The current state of the economy is shown in Figure 6. The aggregate-demand curve and short-run aggregate-supply curve intersect at a point to the left of long-run aggregate supply.b. A stock market crash leads to a leftward