Questions from Macroeconomics

Q: Use Fisher’s model of consumption to analyze an increase in second-

Use Fisher’s model of consumption to analyze an increase in second-period income. Compare the case in which the consumer faces a binding borrowing constraint and the case in which he does not.

Q: When the stock market crashes, what influence does it have on

When the stock market crashes, what influence does it have on investment, consumption, and aggregate demand? Why? How

Q: List four reasons firms might hold inventories.

List four reasons firms might hold inventories.

Q: After every policy meeting, the Federal Reserve issues a statement (

After every policy meeting, the Federal Reserve issues a statement (sometimes called the press release), which you can find on the Fed’s Web site (http://www.federalreserve.gov/monetarypolicy/ fomccal...

Q: How does a person’s interpretation of macroeconomic history affect his view of

How does a person’s interpretation of macroeconomic history affect his view of macroeconomic policy?

Q: Some economists have proposed the rule that the cyclically adjusted budget always

Some economists have proposed the rule that the cyclically adjusted budget always be balanced. Compare this proposal to a strict balanced-budget rule. Which is preferable? What problems do you see wit...

Q: According to the traditional view of government debt, how does a

According to the traditional view of government debt, how does a debt-financed tax cut affect public saving, private saving, and national saving?

Q: In recent years, as described in this chapter, both the

In recent years, as described in this chapter, both the United States and Greece have experienced increases in government debt and a significant economic downturn. In what ways were the two situations...

Q: In the Solow model, how does the saving rate affect the

In the Solow model, how does the saving rate affect the steady-state level of income? How does it affect the steady-state rate of growth?

Q: How does the leverage ratio influence a financial institution’s stability in response

How does the leverage ratio influence a financial institution’s stability in response to bad economic news?