Questions from Macroeconomics

Q: In addition to depending on the exchange rate (and therefore on

In addition to depending on the exchange rate (and therefore on the interest rate), imports may depend on short- run output: when the economy is booming, consumers tend to demand more foreign goods. T...

Q: Suppose there is a currency crisis in the rest of the world

Suppose there is a currency crisis in the rest of the world, leading to an increase in demand for U.S. dollars (a “flight to safety”). Use the AS/AD framework to explain the effects of this shock on t...

Q: What role do nominal rigidities play in the analysis of business cycle

What role do nominal rigidities play in the analysis of business cycle models?

Q: What is the marginal propensity to consume? How is it affected

What is the marginal propensity to consume? How is it affected by borrowing constraints or precautionary saving issues?

Q: What are the key building blocks of the neoclassical consumption model?

What are the key building blocks of the neoclassical consumption model?

Q: What is an intertemporal budget constraint, and where does it come

What is an intertemporal budget constraint, and where does it come from? What is the economic interpretation of the intertemporal budget constraint?

Q: How does the arbitrage equation help pin down the price of housing

How does the arbitrage equation help pin down the price of housing in our simple theory? What role does leverage play?

Q: What is the arbitrage equation, and why is it useful in

What is the arbitrage equation, and why is it useful in studying investment?

Q: What is a capital gain, and what role does it play

What is a capital gain, and what role does it play in the arbitrage equation?

Q: In many other countries, especially in Europe, there is a

In many other countries, especially in Europe, there is a value- added tax (sometimes called a VAT). Firms are charged taxes based on the value- added they produce. That is, they are allowed to deduct...