Tutorial 9_2011 - ECON1002 Introductory Macroeconomics, S1...

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ECON1002 Introductory Macroeconomics, S1 2011 Tutorial Tasks 1 Reading Guide : Review Chapters 11, 12 and 13 of BOF as preparation for this tutorial. K EY C ONCEPTS : AS-AD M ODEL , E CONOMIC G ROWTH ; G ROWTH R ATES ; S OURCES OF G ROWTH ; C OSTS AND B ENEFITS OF G ROWTH ; P RODUCTION F UNCTIONS . R EVIEW OF C ONCEPTUAL U NDERSTANDING These are to be attempted before the tutorial. They will not normally be covered in the tutorial, maybe, except for a quick review, time permitting. The answers are typically found in the textbook and lecture notes. 1. BOF, page 371, Review Questions 1, 2. 2. BOF, page 371, Review Question 6, 7. P ROBLEMS Based on Lecture Topic 7 (BOF Chapter 11) 1. Suppose that the government cuts taxes in response to a recessionary gap, but because of legislative delays the tax cut is not put in place for 18 months. Using an AD–AS diagram and assuming that the government’s objective is to stabilise output and inflation, show how this policy action might actually prove to be counterproductive. 2.
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This note was uploaded on 08/18/2011 for the course ECON 1002 taught by Professor Markmelatos during the Three '10 term at University of Sydney.

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Tutorial 9_2011 - ECON1002 Introductory Macroeconomics, S1...

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