Questions from Macroeconomics

Q: What is the Euler equation for consumption, and what is its

What is the Euler equation for consumption, and what is its economic interpretation?

Q: Consider the complete dynamic response of the economy to a temporary rise

Consider the complete dynamic response of the economy to a temporary rise in financial frictions in the AS/AD framework. (a) Draw the AS/AD graph associated with this shock. (b) Plot the impulse respo...

Q: How much can the government borrow?

How much can the government borrow?

Q: Are TFP shocks a reasonable explanation for the business cycles we see

Are TFP shocks a reasonable explanation for the business cycles we see in modern economies? Why and why not?

Q: What economic decisions do agents make in DSGE models?

What economic decisions do agents make in DSGE models?

Q: In the simple theory developed in the chapter, why is the

In the simple theory developed in the chapter, why is the stock price equal to the dividend divided by interest rate (net of the capital gain)?

Q: Why do economists use the terms “investment” and “capital

Why do economists use the terms “investment” and “capital” in very different contexts (physical investment and physical capital versus financial investment and financial capital)?

Q: Between 1970 and 1995, the dollar depreciated sharply versus the Japanese

Between 1970 and 1995, the dollar depreciated sharply versus the Japanese yen, while the average value of this exchange rate did not change much between 1995 and 2016. What might explain these facts?...

Q: Consider the neoclassical consumption model with log utility and

Consider the neoclassical consumption model with log utility and

Q: Consider the Euler equation for consumption for log utility, equation (

Consider the Euler equation for consumption for log utility, equation (16.8), and answer the following questions: (a) If the real interest rate is 5 percent and