What are open-market operations, and how do they influence the money supply?
> What do you do when your customer starts to shrink, both literallyand figuratively? The sale of soft drinks in the U.S. is not what it used to be. The $98 billion soft-drink industry is beingchallenged by changes in consumers· attitudes toward bothsugar-
> Gamification was discussed in Chapter 6. For specific segments of a market, a gamification approach might help elicit a desired behavior from consumers, and of course in many cases the desired behavior is an increase in consumption of the related product
> Identify at least five alternative product options that you are interested in. Narrow down your selection to two or three choices. Which are the most feasible? What are the pros and cons of each?
> Describe the problem that might lead you to purchase this product.
> Make a final decision about which product you will purchase. Describe the heuristics that aided in your decision making.
> Use the Internet to gather some initial information about the product you chose. Visit at least two stores or locations where the product may be purchased to gather further information.
> If this is a product you have actually purchased, explain the reasoning behind your current satisfaction or dissatisfaction with the product. If not, develop several reasons you might be satisfied or dissatisfied with the product.
> Explain the steps in the business buying decision process.
> What is a buying center? What are the roles of the various people in a buying center?
> Describe the buyclass framework. What are new-task buys, modified rebuys, and straight rebuys?
> How do we generally classify B2B markets?
> Trace the evolution of the marketing concept.
> Explain what we mean by derived demand, inelastic demand, fluctuating demand, and joint demand.
> How do B2B markets differ from consumer markets?
> What are gender roles?
> What are opinion leaders?
> What are reference groups, and how do they influence consumers?
> What is the significance of social class to marketers?
> What are cultures, subcultures, and micro cultures? How do culture, subcultures, and microcultures influence consumer behavior?
> How do situational influences, such as the physical environment and time, shape consumer purchase decisions?
> What is personality?
> What are the three components of attitudes?
> List and describe the elements of the marketing mix.
> What is behavioral learning? What is cognitive learning?
> How does gamification influence consumers’ motivation to interact with brands?
> Describe Maslow’s hierarchy of needs as it relates to motivation.
> What is perception? Explain the parts of the perception process: exposure, attention, and interpretation. For marketers, what are the implications of each of these components?
> Explain the steps in the consumer decision-making process?
> Explain habitual decision making, limited problem solving, and extended problem solving. What is the role of perceived risk in the decision process?
> Explain the role of intranets and extranets in B2B e-commerce. Describe the security issues firms face in B2B e-commerce and some safeguards firms use to reduce their security risks.
> What is single sourcing? Multiple sourcing? Outsourcing?
> Explain what lifestyle means.
> What is family life cycle?
> What is involved in marketing planning?
> What is consumer behavior? Why is it important for marketers to understand consumer behavior?
> In the buying center, the gatekeeper controls information flow to others in the center. Thus, the gatekeeper determines which possible sellers are heard and which are not. Does the gatekeeper have too much power? What policies might be implemented to mak
> When firms implement a single sourcing policy in their buying, other possible suppliers do not have an opportunity to compete for the business. Is this ethical? What are the advantages to the company? What are the disadvantages?
> The practice of buying business products based on sealed competitive bids is popular among all types of business buyers. What are the advantages and disadvantages of this practice to buyers? What are the advantages and disadvantages to sellers? Should co
> M-commerce (short for mobile commerce) is a rapidly growing category of e-commerce that takes place via a smart phone or tablet instead of a desktop or laptop computer. How has M-commerce changed the way consumers shop? What do marketers need to do now a
> E-commerce is dramatically changing the way B2B transactions take place. What are the advantages of B2B e-commerce to companies? To society? Are there any disadvantages of B2B e-commerce?
> Consumers often buy products because they feel pressure from reference groups to conform. Does conformity exert a positive or a negative influence on consumers? With what types of products is conformity more likely to occur?
> Outsourcing and offshoring are practices often surrounded by controversy. What are the benefits of outsourcing for businesses? For consumers? What are the disadvantages of outsourcing for businesses? For consumers? Should outsourcing be regulated to prot
> Assume you are a sales manager of products used in landscaping. Your customers are municipalities that range in size from very large to very small. Your company offers its customers a wide range of products—everything from simple rakes and shovels to lar
> Think about some of the products and services you purchase each month (pizza on Saturday night or your smart phone bill) as well as a few impulse purchases you might make (new music from iTunes). Categorize each of these items according to Maslow’s hiera
> What does ii mean for a firm to have a competitive advantage? What gives a firm a competitive advantage?
> Briefly explain what marketing is.
> The country of Leverett is a small open economy. Suddenly, a change in world fashions makes the exports of Leverett unpopular. a. What happens in Leverett to saving, investment, net exports, the interest rate, and the exchange rate? b. The citizens of Le
> Who pays the inflation tax?
> An economy has the following money demand function: (M/P)d = .2Y/i ½. a. Derive an expression for the velocity of money. What does velocity depend on? Explain why this dependency may occur. b. Calculate velocity if the nominal interest rate i is 4 percen
> An economy has a monetary base of 1,000 $1 bills. Calculate the money supply in scenarios (a)–(d) and then answer part (e). a. All money is held as currency. b. All money is held as demand deposits. Banks hold 100 percent of deposits as reserves. c. All
> What is the role of constant returns to scale in the distribution of income?
> If a 10 percent increase in both capital and labor causes output to increase by less than 10 percent, the production function is said to exhibit decreasing returns to scale. If it causes output to increase by more than 10 percent, the production function
> What does the consumer price index measure? List three ways in which it differs from the GDP deflator.
> Suppose a woman marries her butler. After they are married, her husband continues to wait on her as before, and she continues to support him as before (but as a husband rather than as an employee). How does the marriage affect GDP? How do you think it sh
> What is a market-clearing model? When is it appropriate to assume that markets clear?
> In the country of Wiknam, the velocity of money is constant. Real GDP grows by 3 percent per year, the money stock grows by 8 percent per year, and the nominal interest rate is 9 percent. What is a. the growth rate of nominal GDP? b. the inflation rate?
> What do you think are the defining characteristics of a science? Do you think macroeconomics should be called a science? Why or why not?
> What is the main advantage of holding a stock mutual fund rather than an individual stock?
> Nation A has a well-developed financial system, where resources flow to the capital investments with the highest marginal product. Nation B has a less-developed financial system from which some would-be investors are excluded. a. Which nation would you e
> Why do many economists project increasing budget deficits and government debt over the next several decades?
> Draft a letter to the senator described in Section 19-3, explaining the logic of the Ricardian view of government debt and evaluating its practical relevance.
> Why would more accurate economic forecasting make it easier for policymakers to stabilize the economy? Describe two ways economists try to forecast developments in the economy.
> When cities pass laws limiting the rent landlords can charge on apartments, the laws usually apply to existing buildings and exempt any buildings not yet built. Advocates of rent control argue that this exemption ensures that rent control does not discou
> What is Tobin’s q, and what does it have to do with investment?
> Suppose that the government levies a tax on oil companies equal to a proportion of the value of the company’s oil reserves. (The government assures the firms that the tax is for one time only.) According to the neoclassical model, what effect will the ta
> Describe the evidence that was consistent with Keynes’s conjectures and the evidence that was inconsistent with them.
> In the Cagan model, if the money supply is expected to grow at some constant rate µ (so that Emt+s = mt + sµ), then Equation A9 can be shown to imply that pt = mt + ÿµ. a. Interpret this result. b. What happens to the price level pt when the money supply
> Gabe and Gita both obey the two-period Fisher model of consumption. Gabe earns $100 in the first period and $100 in the second period. Gita earns nothing in the first period and $210 in the second period. Both of them can borrow or lend at the interest r
> On a carefully labeled graph, draw the dynamic aggregate demand curve. Explain why it has the slope it has.
> Suppose the monetary-policy rule has the wrong natural rate of interest. That is, the central bank follows this rule: where p’ does not equal r, the natural rate of interest in the goods demand equation. The rest of the dynamic AD&acir
> How is the Phillips curve related to aggregate supply?
> Suppose that an economy has the Phillips curve π = π -1 - 0.5(u - 5). a. What is the natural rate of unemployment? b. Graph the short-run and long-run relationships between inflation and unemployment. c. How much cyclical unemployment is necessary to re
> In the Mundell–Fleming model with floating exchange rates, explain what happens to aggregate income, the exchange rate, and the trade balance when the money supply is reduced. What would happen if exchange rates were fixed rather than floating?
> A small open economy is described by the following equations: C =50 +.75(Y - T ) I = 200 - 20r NX = 200 - 50Ɛ M/P = Y - 40r G = 200 T = 200 M = 3000 P = 3 r* = 5 a. Derive and graph the IS* and LM* curves. b. Calculate the equilibrium exchange rate, leve
> Over the past several decades, the economies of the world have become more financially integrated. That is, investors in all nations have become more willing and able to take advantage of financial opportunities abroad. Consider how this development affe
> What is the impact of an increase in taxes on the interest rate, income, consumption, and investment?
> Use the IS–LM model to predict the short run effects of each of the following shocks on income, the interest rate, consumption, and investment. In each case, explain what the Fed should do to keep income at its initial level. Be sure to use a graph in ea
> Describe the functions of money.
> Use the theory of liquidity preference to explain why an increase in the money supply lowers the interest rate. What does this explanation assume about the price level?
> In the Keynesian cross model, assume that the consumption function is given by C = 120 + 0.8 (Y - T). Planned investment is 200; government purchases and taxes are both 400. a. Graph planned expenditure as a function of income. b. What is the equilibrium
> Give an example of a price that is sticky in the short run but flexible in the long run.
> Suppose the Fed reduces the money supply by 5 percent. Assume the velocity of money is constant. a. What happens to the aggregate demand curve? b. What happens to the level of output and the price level in the short run and in the long run? Give a precis
> In the steady state of the Solow model, at what rate does output per person grow? At what rate does capital per person grow? How does this compare with the U.S. experience?
> An economy has a Cobb–Douglas production function: Y = K a(LE)1-a. (For a review of the Cobb–Douglas production function, see Chapter 3.) The economy has a capital share of a third, a saving rate of 24 percent, a depreciation rate of 3 percent, a rate of
> Labor productivity is defined as Y/L, the amount of output divided by the amount of labor input. Start with the growth-accounting equation and show that the growth in labor productivity depends on growth in total factor productivity and growth in the cap
> Why might an economic policymaker choose the Golden Rule level of capital?
> In the discussion of German and Japanese postwar growth, the text describes what happens when part of the capital stock is destroyed in a war. By contrast, suppose that a war does not directly affect the capital stock, but that casualties reduce the labo
> Describe the difference between frictional unemployment and structural unemployment.
> What are the three functions of money? Which of the functions do the following items satisfy? Which do they not satisfy? a. A credit card b. A painting by Rembrandt c. A subway token
> The residents of a certain dormitory have collected the following data: people who live in the dorm can be classified as either involved in a relationship or uninvolved. Among involved people, 10 percent experience a breakup of their relationship every m
> Define the nominal exchange rate and the real exchange rate.
> Consider an economy described by the following equations: Y= C + I + G + NX, Y = 8,000, G = 2,500, T = 2,000, C = 500 + 2/3 (Y - T), I = 900 - 50r, NX = 1,500 - 250e, R= r* = 8. a. In this economy, solve for private saving, public saving, national saving
> On September 21, 1995, “House Speaker Newt Gingrich threatened to send the United States into default on its debt for the first time in the nation’s history, to force the Clinton Administration to balance the budget on Republican terms” (New York Times,
> What does the assumption of constant velocity imply?
> Suppose a country has a money demand function (M/P)d 5 kY, where k is a constant parameter. The money supply grows by 12 percent per year, and real income grows by 4 percent per year. a. What is the average inflation rate? b. How would inflation be diffe
> What is fiat money? What is commodity money?
> Explain how each of the following events affects the monetary base, the money multiplier, and the money supply. a. The Federal Reserve buys bonds in an open market operation. b. The Fed increases the interest rate it pays banks for holding reserves. c. T
> Explain how a competitive, profit-maximizing firm decides how much of each factor of production to demand.
> Suppose the production function in medieval Europe is Y 5 K 0.5L0.5, where K is the amount of land and L is the amount of labor. The economy begins with 100 units of land and 100 units of labor. Use a calculator and equations in the chapter to find a num
> What determines the amount of output an economy produces?
