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Macroeconomics Notes 2-21-08

Macroeconomics Notes 2-21-08 - Macroeconomics Notes...

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Macroeconomics Notes 2/21/08 Professor Ayittey’s CNN Interview Today on Aid to Africa - The aid resources that Africa needs can be found in Africa itself - “Foreign aid to Africa is like pouring water into a bucket with holes” 1. Africa receives about $25 billion every year in aid 2. However, Africa looses a great deal of money due to the following: $148 billion every year in corruption $10 billion lost to civil wars $20 billion worth of food imports Up until the 1960s Africa was able to feed itself, but much infrastructure has since been destroyed and this is no longer possible Test Overview - Get straight to the point - Be sure to explain everything - Questions 1. (b) Opportunity cost is just what you are sacrificing, so you are sacrificing your $6000 summer job salary and free housing. 2. (a) Don’t answer a question like this; too involved. However, even a supercomputer with unlimited memory would not be able to solve the economic problem because there are infinite wants and they are not static—wants are constantly changing. Your wants could be changed by anything. Also, there are only limited resources, and these resources are, like wants, constantly changing— someone could discover a huge reserve of oil which would change the supply and demand paradigm. The computer could never calculate all the supply and demand accurately because there are too many changing factors.
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