KW_Macro_Ch_06_End_of_Chapter_Problems

KW_Macro_Ch_06_End_of_Chapter_Problems - chapter 6 >...

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>> Macroeconomics: The Big Picture chapter 6 1. Which of the following questions are relevant for the study of macroeconomics and which for microeconomics? a. How will Ms. Martin’s tips change when a large manufacturing plant near the restau- rant where she works closes? b. What will happen to spending by consumers when the economy enters a downturn? c. How will the price of oranges change when a late frost damages Florida’s orange groves? d. How will wages at a manufacturing plant change when its workforce is unionized? e. What will happen to U.S. exports as the dollar becomes less expensive in terms of other currencies? f. What is the relationship between a nation’s unemployment rate and its inflation rate? 2. When one person saves, that person’s wealth is increased, meaning that he or she can con- sume more in the future. But when everyone saves, everyone’s income falls, meaning that everyone must consume less today. Explain this seeming contradiction. PROBLEMS
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3. What was the Great Depression? How did it affect the role of government in the economy and the macroeconomic toolkit? 4. Why do we consider a business-cycle expansion different from long-run economic growth? Why do we care about the size of the long-run growth rate of real GDP versus the size of
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This note was uploaded on 04/10/2008 for the course ECONOMICS 103 taught by Professor Sheflin during the Spring '08 term at Rutgers.

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KW_Macro_Ch_06_End_of_Chapter_Problems - chapter 6 >...

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