Contractionary fiscal policies
1. Increase taxes
2. Decrease gov. spending (austerity)
Both Keynesian and new-classical possible
2 types of Automatic stabilizers
Work towards stabilising the economy without
any gov. intervention
Progressive income tax
Une
Definition of Inflation and how it is measured
Inflation is the sustained upward movement to
the average price level over a given period of
time
Measured using the consumer price index (CPI)
Costs of inflation
1. Loss of purchasing power
2. Uncertainty
3.
5 Major policies of a government
Full employment
Economic Growth
Economic Development (FEEEP)
External Equilibrium
Price stability
3 Methods of measuring GDP
Output (O)
Expenditure (E)
Income (Y)
O-E-Y
Formula for GDP
GDP = C+ I + G + (X - M)
C = consumpt
Investment
Addition of capital stock to the economy
Movement along the AD curve
Can only be caused by a change in price level.
AD is inversely related
What causes shifts in consumption
Changes in income
Changes in interest rates
Changes in expectation / c
Keynesian LRAS + diagram
1) AS = perfectly elastic at low levels of economic activity. Producers can raise output
without raising price level due to spare capacity
2) As economy approaches Yfe, spare capacity is used up and FOP become scarce - price
level
Demand pull- inflation diagram
Caused by consistent AD shifts to the right
Associated with the boom phase of the business
cycle
Cost-push inflation diagram
Rise in factor prices shifts AS left
Types of cost-push inflation
1. Wage push - labour unions push
Strengths and Weaknesses of monetary
policies
Strengths:
Relatively quick implementation
Central bank independence
No political constraints
No crowding out
Ability to adjust interest rate incrementally
Weaknesses:
Time lag
Possible ineffectiveness in rece
620
Eutrophication
the european environment Agency is to establish
tural
a practices, where both inorganic and organic
seamless environmental information system and
fertilizers
asmay either drain or be leeched into a lake.
sist the eU in its efforts to in
CHAPTER 5 Review .
1. The rate of inflation is the:
A) median level of prices.
B) average level of prices.
C) percentage change in the level of prices.
D) measure of the overall level of prices.
2. If there are 100 transactions in a year and the average v
DEMAND, SUPPLY, and MARKET EQUILIBRIUM
DEMAND
MARKETS
SUPPLY
in a specific period
at each of various prices.
- A schedule or curve representing the willingness of buyers
At each possible price
during a specific period
- A schedule or curve showing the amo
Capitalization
In general, capital letters refer to population attributes (i.e., parameters); and lowercase letters refer to sample attributes (i.e., statistics). For example,
P refers to a population proportion; and p, to a sample proportion.
X refers to
Sample questions for Midterm 1
Chapter 5
1. The price elasticity of demand measures how much
a. quantity demanded responds to a change in price.
b. quantity demanded responds to a change in income.
c. price responds to a change in demand.
d. demand respon
spend on national parks
c. a company president deciding whether to open a
new factory
d. a professor deciding how much to prepare for class
e. a recent college graduate deciding whether to go to
graduate school
. You are trying to decide whether to take a
. Consider the markets for DVDs, TV screens, and
e. A stun; market crash lowers people 5 wealtn. I.- u Lu: nun-cu put: Lu uua manna wrtc ucww uu:
equilibrium price, what would drive the market
tickets at movie theaters. toward the equilibrium?
a. For each
11. Suppose that the price of basketball tickets at your
Price Quantity Dsma ndad
college is determined by market forces. Cunen’rly the —
demand and supply schedules are as follows: $4 4,000 tickets
8 3,000
- - - - 1 2 2,000
W 10 1,000
$4 10,000 tickets 8
a point on your production possibilities frontier
that the Hawks might choose and a point that the
Doves might choose.
(:1. Imagine that an aggressive neighboring country
reduces the size of its military. As a result, both the
Hawks and the Doves reduce t
Quiz 1
1. (50 points) Maria has decided always to spend one-third of her income on clothing.
a. What is her income elasticity of clothing demand?
b. What is her price elasticity of clothing demand?
c. If Marias tastes change and she decides to spend only
Chapter 10 Homework :
1- As president of Econivalia, you are constantly strained for funds to pay your troops. Your chief
economist suggests the following plan:
"When you collect your tax payments from your residents, insist on being paid in gold coins. T
Chapter13Homework:
1- How will the following affect labor force participation rates, labor supply, and unemployment?
In an attempt to get a handle on increasing Social Security shortfalls, Congress and the president decide to raise the
Social Security tax
Assume that in 2015, the following prevails in the Republic of Nurd:
Government spending (G) = $0
Net taxes (T) = $0
Planned investment (I) =
$25
Income (Y) =
$200
Assume that households of Nurd consume
80
percent of their income; they save
20
percent of
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Brooklyn College
Advanced Econometrics 7021X — Spring 2014 Date:
Instructor: Georgios Koi-misis
36/\°0
Midterm Exam
Instructions: Please show all work when trying to get to the result (write down formulas, explai
4-
5-
Going from 0 percent to 50 percent of the population , each increase in
the vaccination rate increase the net lives saved, but when after going
from 50 percent to 60 percent there is a net decrease of 4 percent,
There is no need to vaccinate the add
HOMEWORK 3
DUE: Bring your work on the final day
Please show detailed work to get full credit! There are 13 questions in this problem set.
QUESTION 1.
A random sample of 80 companies who announced corrections to their balance sheets took
a mean time of 8.
Chapter 13- SimpleLinear Regression
A scatter plot can be used to show the relationship between two variables
Correlation analysis is used to measure the strength of the association (linear
relationship) between two variables
Correlation is only concerned
Numerical Descriptive Measures
The central tendency is the extent to which all the data values group around a typical
or central value.
The variation is the amount of dispersion or scattering of values
The shape is the pattern of the distribution of value
Chapter 1
Statistics- The branch of mathematics that transforms data into useful
information for decision makers.
Statistics lets you know about the risks associated with making a business
decision and allows you to understand and reduce the variation in