notes_macro_hw1 - = 1.1% + 1.5% Macro Notes © G.Karras...

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Macro Notes © G.Karras 2008 MACROECONOMICS Georgios Karras* University of Illinois at Chicago * Professor of Economics; Mailing Address: Department of Economics, University of Illinois at Chicago, 601 S. Morgan St., Chicago, IL 60607-7121; e-mail: [email protected] . Lecture Draft Do not cite without permission
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Macro Notes © G.Karras 2008, p.2 HOMEWORK 1: ANSWERS 1. 1 1 = t t t t GDP GDP GDP rate growth GDP China ’06, Nominal GDP growth rate: % 8 . 18 188 . 0 1 . 22165 1 . 22165 3 . 26324 06 06 07 = = GDP GDP GDP … etc. …
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Macro Notes © G.Karras 2008, p.3 + = rate Inflation rate growth Real rate growth Nominal GDP GDP China ’07 18.8% = 13.0% + 6.1% China ’08 14.2% = 9.0% + 5.2% + U.S. ’07 4.8% = 2.0% + 2.8% U.S. ’08 2.6%
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Unformatted text preview: = 1.1% + 1.5% Macro Notes © G.Karras 2008, p.4 2. Oil prices ↑ Î MPN ↓ Î N D ↓ (shifts left) N ↓↓ to N 1 << N F ♦ short run: A → B U ↑ Î u C > 0 ( w fixed) Y ↓↓ to Y 1 << Y F (possible recession) N ↑ to N F ’ < N F ♦ long run: u C > 0 Î w ↓ Î B → C U ↓ Î u C = 0 ( w flexible) Y ↑ (recovery) to Y F ’ < Y F Macro Notes © G.Karras 2008, p.5 N N Y w N S N D N D ’ MPN ↓ MPN ↓ Production function A B C N F N F ’ N 1 N F Y F N F ’ Y F ’ N 1 Y 1 w w 1 Macro Notes © G.Karras 2008, p.6 Japan: “Short Run” “Long Run” N ↓ 3 ↑ 3 U ↑ 3 ↑ 8 u ↑ 3 ↑ 8 w-growth ↓ 3 ↑ w ↑ 8 ↑ Y ↓ 3 ↑ 3 Macro Notes © G.Karras 2008...
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This note was uploaded on 04/08/2010 for the course ECON econ218 taught by Professor Tom during the Spring '10 term at University of Illinois, Urbana Champaign.

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notes_macro_hw1 - = 1.1% + 1.5% Macro Notes © G.Karras...

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