Questions from Macroeconomics

Q: A further look at Table 18-1 Table 18-1

A further look at Table 18-1 Table 18-1 has four entries. Using Figure 18-5 as a guide, draw the situations illustrated in each of the four entries in Table 18-1. Be sure you understand why the direct...

Q: a. Suppose there is an increase in foreign output. Show

a. Suppose there is an increase in foreign output. Show the effect on the domestic economy (i.e., replicate Figure 18-4). What is the effect on domestic output? On domestic net exports? b. If the inte...

Q: a. Consider an economy with a trade deficit (NX <

a. Consider an economy with a trade deficit (NX < 0) and with output equal to its natural level. Suppose that, even though output may deviate from its natural level in the short run, it returns to its...

Q: Consider an open economy characterized by the following equations: C

Consider an open economy characterized by the following equations: C = c0 + c1(Y – T) I = d0 + d1Y IM = m1Y X = x1Y* The parameters m1 and x1 are the propensities to import and export. Assume that t...

Q: Consider an open economy in which the real exchange rate is fixed

Consider an open economy in which the real exchange rate is fixed and equal to one. Consumption, investment, government spending, and taxes are given by C = 10 + 0.8 (Y – T), I = 10, G = 10, and T =...

Q: The Tax Cut and Jobs Act was passed by Congress in December

The Tax Cut and Jobs Act was passed by Congress in December 2017. GDP grew from $18,000 billion (2012 dollars) in 2017 to $18,500 billion (2012 dollars) in 2018. a. By what percentage did real GDP gro...

Q: a. National saving is defined as private saving plus government surplus

a. National saving is defined as private saving plus government surplus, that is, S + T - G. Now, using equation (18.5), describe the relation among current account deficit, net investment income, and...

Q: Using the information in this chapter, label each of the following

Using the information in this chapter, label each of the following statements true, false, or uncertain. Explain briefly. a. The interest rate parity condition means that interest rates are equal acro...

Q: Use a search engine to find material on the Trump administration tariffs’

Use a search engine to find material on the Trump administration tariffs’ impact on the economy. What do economists say about them? You will learn something even by just reading the heading and the fi...

Q: Consider an open economy with flexible exchange rates. Suppose output is

Consider an open economy with flexible exchange rates. Suppose output is at the natural level, but there is a trade deficit. The goal of policy is to reduce the trade deficit and leave the level of ou...