Questions from Macroeconomics

Q: Structural unemployment is sometimes said to result from a mismatch between the

Structural unemployment is sometimes said to result from a mismatch between the job skills that employers want and the job skills that workers have. To explore this idea, consider an economy with two...

Q: Suppose that the reserve requirement for checking deposits is 10 percent and

Suppose that the reserve requirement for checking deposits is 10 percent and that banks do not hold any excess reserves. a. If the Fed sells $1 million of government bonds, what is the effect on the e...

Q: Between January 2010 and January 2016, U.S. employment

Between January 2010 and January 2016, U.S. employment increased by 12.1 million workers, but the number of unemployed workers declined by only 7.3 million. How are these numbers consistent with each...

Q: What are reserve requirements? What happens to the money supply when

What are reserve requirements? What happens to the money supply when the Fed raises reserve requirements?

Q: What is the theory of liquidity preference? How does it help

What is the theory of liquidity preference? How does it help explain the downward slope of the aggregate-demand curve?

Q: Explain whether the following statements are true, false, or uncertain

Explain whether the following statements are true, false, or uncertain a. “Inflation hurts borrowers and helps lenders, because borrowers must pay a higher rate of interest.” b. “If prices change in a...

Q: Purchasing-power parity holds between the nations of Ectenia and Wiknam

Purchasing-power parity holds between the nations of Ectenia and Wiknam, where the only commodity is Spam. a. In 2015, a can of Spam costs 4 dollars in Ectenia and 24 pesos in Wiknam. What is the exch...

Q: Suppose that Americans decide to increase their saving. a.

Suppose that Americans decide to increase their saving. a. If the elasticity of U.S. net capital outflow with respect to the real interest rate is very high, will this increase in private saving have...

Q: For each of the following events, explain the short-run

For each of the following events, explain the short-run and long-run effects on output and the price level, assuming policymakers take no action. a. The stock market declines sharply, reducing consume...

Q: Suppose government spending increases. Would the effect on aggregate demand be

Suppose government spending increases. Would the effect on aggregate demand be larger if the Federal Reserve held the money supply constant in response or if the Fed were committed to maintaining a fi...