海南大学2005-06学年度第2学期《宏观经济学》答案(A卷) Please answer the Questions(每题10分，共同100分) 1.Look at the newspapers for the past few days.What new economic statistics have been released?How do you interpret these statistics? 1.A large number of economic statisties are released regularly.These include the following: Gross Domestic Product-the market value of all final goods and services produced in a year. The Unem aployment Rate-the percentage of the civilian labor force who do not have a job Corporate Profits-the accounting profits remaining after taxes of all manufacturing corporations.It gives an indication of the general financial health of the corporate sector. The Consumer Price Index(CPI)-a easure of the average price that pay for the goods they buyichanges in the CPlare a measure of The Trade Balance-the difference between the value of goods exported abroad and the value of goods imported fromabroad. appens to consumption,investment,and the interest rate when 2.When the government increases taxes,disposable income falls,and therefore consumption falls as well.The decrease in consumption equals the amount that taxes in ease multiplied by the ma rginal me(MPC)The higher the Mec is,the greater is the negative effect of the a prope increase on consumption.Because output is fixed by the factors of production and the production technology,and government purchases have not changed,the decrease in consumption must be offset by an increase in investment.For investment to rise,the real interest rate must fall.Therefore,a taxincrease leads to a decrease in consumption. an increase in investmen and a fall in the real interest rate. 3.According to the neoclassical theory of distribution,the real wage earned by any worker equals that worker's marginal productivity.Let's use this insight to examine the and bar ver the pat me hasr mes of two g hers substantial because of technological progress.According to the neoclassical theory,what should have happened to their real wage? b.In what units is the real wage discussed in part (a)measured? c.Over the same period,the productivity of barbers has remained constant.What
海南大学 2005-06 学年度第 2 学期《宏观经济学》答案(A 卷) Please answer the Questions（每题 10 分，共同 100 分） 1. Look at the newspapers for the past few days. What new economic statistics have been released? How do you interpret these statistics? 1.A large number of economic statistics are released regularly. These include the following: Gross Domestic Product—the market value of all final goods and services produced in a year. The Unemployment Rate—the percentage of the civilian labor force who do not have a job. Corporate Profits—the accounting profits remaining after taxes of all manufacturing corporations.It gives an indication of the general financial health of the corporate sector. The Consumer Price Index(CPI)— a measure of the average price that consumers pay for the goods they buy;changes in the CPI are a measure of inflation. The Trade Balance—the difference between the value of goods exported abroad and the value of goods imported from abroad. 2.Explain what happens to consumption, investment, and the interest rate when the government increases taxes. 2.When the government increases taxes,disposable income falls,and therefore consumption falls as well.The decrease in consumption equals the amount that taxes increase multiplied by the marginal propensity to consume(MPC).The higher the MPC is, the greater is the negative effect of the tax increase on consumption.Because output is fixed by the factors of production and the production technology,and government purchases have not changed,the decrease in consumption must be offset by an increase in investment.For investment to rise, the real interest rate must fall. Therefore, a taxincrease leads to a decrease in consumption, an increase in investment,and a fall in the real interest rate. 3.According to the neoclassical theory of distribution,the real wage earned by any worker equals that worker’s marginal productivity. Let’s use this insight to examine the incomes of two groups of workers:farmers and barbers. a.Over the past century,the productivity of farmers has risen substantially because of technological progress.According to the neoclassical theory, what should have happened to their real wage? b. In what units is the real wage discussed in part (a) measured? c.Over the same period,the productivity of barbers has remained constant.What
should have happened to their real wage? d.In what units is the real wage in part(c)measu red? e.Suppose workers can move freely between being farmers and being barbers. What does this mobility imply for the wages of farmers and barbers? f.What do your previous answers imply for the price of haircuts relative to the price of food？ g.Who benefits from technological progress in farming-farmers or barbers? 3.a.According to the neoclassical theory,technical progress that increases the marginal product of farmers causes their real wage to rise. b.The real wage in(a)is measured in terms of farm goods.That is,if the nominal idollars then the real wage is W/PF,where PF is the dollar p rm goods of barbers is,he their real wage is unchanged. d.The real wage in(c)is measured in terms of haircuts.That is,if the nominal wage is in dollars,then the real wage is W/PH,where PH is the dollar price of a haircut. n move freely being farmers and being barbers,then they f.If the nominal wage W is the same in both sectors,but the real wage in terms of farm goods is greater than the real wage in terms of haircuts,then the price of haircuts must have risen relative to the price of farm goods. g.Both groups benefit from technological progress in farming 4.Explain the roles of monetary and fiscal policy in causing and ending hvperinflations. 4.A hyperinfation always moetary policy.That is,the price level ca grow h supply of 00g do not end d unless the government drastically reduces money growth.Thi explanation,however,begs a central question:Why does the government start and then stop printing lots of money?The answer almost always lies in fiscal policy:When the government has a large budget deficit(possibly due to a recent war or some other major event)that it can not fund by borro ne it resorts to printing money to pay its bills.And only when this fiscal problem is alleviated-by reducing government spending and collecting more taxes-can the government hope to slow its rate of money growth. 5.Describe the differ ence between frictional unem ployment and structual unemployment 5.Frictional unemployment is the unemployment caused by the time it takes to match workers and jobs.Finding an appropriate job takes time because the flow of information about job candidates and job vacancies is not instantaneous
should have happened to their real wage? d. In what units is the real wage in part(c)measured? e.Suppose workers can move freely between being farmers and being barbers. What does this mobility imply for the wages of farmers and barbers? f.What do your previous answers imply for the price of haircuts relative to the price of food? g.Who benefits from technological progress in farming—farmers or barbers? 3. a.According to the neoclassical theory,technical progress that increases the marginal product of farmers causes their real wage to rise. b.The real wage in(a)is measured in terms of farm goods.That is,if the nominal wage is in dollars,then the real wage is W/PF, where PF is the dollar price of farm goods. c.If the marginal productivity of barbers is unchanged,then their real wage is unchanged. d.The real wage in(c)is measured in terms of haircuts.That is,if the nominal wage is in dollars,then the real wage is W/PH,where PH is the dollar price of a haircut. e.If workers can move freely between being farmers and being barbers,then they must be paid the same wage W in each sector. f.If the nominal wage W is the same in both sectors,but the real wage in terms of farm goods is greater than the real wage in terms of haircuts,then the price of haircuts must have risen relative to the price of farm goods. g.Both groups benefit from technological progress in farming. 4.Explain the roles of monetary and fiscal policy in causing and ending hyperinflations. 4. A hyperinflation always reflects monetary policy.That is,the price level cannot grow rapidly unless the supply of money also grows rapidly;and hyperinflations do not end unless the government drastically reduces money growth. This explanation,however, begs a central question:Why does the government start and then stop printing lots of money? The answer almost always lies in fiscal policy:When the government has a large budget deficit(possibly due to a recent war or some other major event)that it can not fund by borrowing,it resorts to printing money to pay its bills.And only when this fiscal problem is alleviated—by reducing government spending and collecting more taxes—can the government hope to slow its rate of money growth. 5.Describe the difference between frictional unemployment and structual unemployment. 5. Frictional unemployment is the unemployment caused by the time it takes to match workers and jobs.Finding an appropriate job takes time because the flow of information about job candidates and job vacancies is not instantaneous
Because different jobs require different skills and pay different wages unemployed workers may not accept the first job offer they receive wait unemployment is the unemployment resulting from wage rigidity and job rationing.These workers are unemployed not because they are actively searching for a job that best suits their skills (as in the case of frictional unemployment), but because at the prevailing real wage the supply of labor exceeds the demand.If the wage doe not adjust to clear the labor market,then th e workers must "wait"for jobs to become available.Wait unemployment thus arises because firms fail to reduce wages despite an excess supply of labor. 6 Which has the longer inside lag monetary or fiscal policy?Which has the longer outside lag?Why? 6.The inside lag is the time it takes for polieymakers to recognize that a shock has hit economy and to put the appropriate policies into effect.Oncea policy is in place,outside lag is the amount of time it takes for the policy action to influence the econom This lag arises because it takes time for spending,income,and employment to respond to the change in 习8甲Xw3u0叫u143800一8湖p5叫8和018s0e proposed until it becomes law.Monetary policy has a relatively inside lagOnce the Fed decides a policy change is needed,it can make the change days or weeks. Monetary policy.however.has a long outside lagAn increase in the money affects the low s invest But many firm investmen t plans fa r in a dvance.Th from the time the Fa takes oout si months before the effects show up in real GDP 7.What is meant by the "time inconsisteney"of economic policy?Why might mpted on an cement they made earlier?In situ n,wh at is is the advantage of a policy rule? 7.The problem of time inconsistency arises because expectations of future policies a how people act todav.As a result.policymakers may want to announce today they intend to follow in the future,in order to influence the expectations held by decisi On decisionm rs have acted on thei r expe the policymakers may be tempted to renege on their announcement For example vour professor has an incentive to announce that there will be an exam in your course.so that you study and learn the material.On the morning on exam,when you have already studied and learned all the material,the professor must be tempted to cal the m so that he she do not H Similarly,the goverment has an nce ve to announce that it will not negotiatior with terrorists.If terrorists believe that they have nothing to gain by kidnapping hostages,then they will not do so.However,once hostages are kidnapped,the government faces a strong temptation to negotiate and make concessions.in monetary policy.suppose the Fed announces a policy of low inflation,everyone believes the
Because different jobs require different skills and pay different wages, unemployed workers may not accept the first job offer they receive. In contrast, wait unemployment is the unemployment resulting from wage rigidity and job rationing. These workers are unemployed not because they are actively searching for a job that best suits their skills (as in the case of frictional unemployment), but because at the prevailing real wage the supply of labor exceeds the demand.If the wage does not adjust to clear the labor market,then these workers must “wait” for jobs to become available. Wait unemployment thus arises because firms fail to reduce wages despite an excess supply of labor. 6 Which has the longer inside lag—monetary or fiscal policy?Which has the longer outside lag? Why? 6.The inside lag is the time it takes for policymakers to recognize that a shock has hit economy and to put the appropriate policies into effect.Once a policy is in place,outside lag is the amount of time it takes for the policy action to influence the econom This lag arises because it takes time for spending,income,and employment to respond to the change in policy. Fiscal policy has a long inside lag—for example,it can take years from the time tax change is proposed until it becomes law.Monetary policy has a relatively inside lag.Once the Fed decides a policy change is needed,it can make the change days or weeks. Monetary policy,however,has a long outside lag.An increase in the money affects the economy by lowering interest rates,which,in turn,increases investment. But many firms make investment plans far in advance.Thus,from the time the Facts,it takes about six months before the effects show up in real GDP. 7.What is meant by the “time inconsistency’’ of economic policy? Why might policymakers be tempted to renege on an announcement they made earlier? In this situation,what is the advantage of a policy rule? 7.The problem of time inconsistency arises because expectations of future policies a how people act today.As a result,policymakers may want to announce today they intend to follow in the future,in order to influence the expectations held by private decisionmakers.Once these private decisionmakers have acted on their expections,the policymakers may be tempted to renege on their announcement. For example,your professor has an incentive to announce that there will be an exam in your course,so that you study and learn the material.On the morning on exam,when you have already studied and learned all the material,the professor must be tempted to cancel the exam so that he or she does not have to grade it. Similarly,the government has an incentive to announce that it will not negotiation with terrorists.If terrorists believe that they have nothing to gain by kidnapping hostages,then they will not do so.However,once hostages are kidnapped,the government faces a strong temptation to negotiate and make concessions. In monetary policy,suppose the Fed announces a policy of low inflation, everyone believes the
announcement The fed then has an incentive to raise inflation because it faces a favorable tradeoff between inflatior employment em with situations in which time inconsistency arises is that people led to distrust policy announcements.Then students do not study for their exams terrorists kidnap hostages,and the Fed faces an unfavorable tradeoff.In these situation a rule that commits the policymaker to a particular policy can sometimes help the policymaker achieve his or her study.terrorists do not take hostages remains low 8.Do you believe the traditional or the Ricardian view of government debt?Why? Which view of gove mment debt you hold depends on how you think consumers ad ers tiing Yo miaht beleve tho ditional view,ther you believe that t a debt-f nced ta several reasons.First consumers may be shortsighted or irrational so that they think their permanent income has increased even though it has not.Second,consumers may face binding borrowing constraints,so that they are only able to consume their current come.Third.c rs may expect that the implied ta liability w will fall on futu 149generations,a nd these co onsumers may not care enough a about th irchildren to lea them a bequest to offset this tax liability.If you hold the Ricardian view then you believe that the preceding objections are not important.In particular,you believe that consumers have the foresight to see that government borrowing today implies future taxes to be levied on them or their descendants Hence.a debt-financed tax cut gives ransitory income that eventual ly will be taken back.As are sumers will save the extra income they receive in order to offset that future tax liability 9.The cyclically adjusted budget deficit is the budget deficit corrected for the effects of the business cycle.In other words,it is the budget deficit that the would be running if u ent were at the natural rate.(It is ako called the full-employment budget deficit.)Some cconomists bave proposed the rule that the cyclically adjusted budget deficit always be balanced.Compare this proposal to a strict balanced-budget rule.Which is preferable?What problems do you see with the rule requiring a balanced cyelically adjusted budget? 9.A rule requiring a cyclically adjusted balanced budget has the potential to overcome. at least partially,the first two objections to a balanced-budget rule that were raised in this chapter.First,this rule allows the government to run countercyclical fiscal policy in order to stabilize the economy.That is,the govemment can run deficits durins rec ons,when taxe fall Second,this rule allows the government to smooth tax rates across years whenincome is especially low or high-it is not necessary to raise tax rates in recessions or to cut them in booms
announcement.The Fed then has an incentive to raise inflation because it faces a favorable tradeoff between inflation and unemployment. The problem with situations in which time inconsistency arises is that people led to distrust policy announcements.Then students do not study for their exams terrorists kidnap hostages,and the Fed faces an unfavorable tradeoff. In these situation a rule that commits the policymaker to a particular policy can sometimes help the policymaker achieve his or her goals—students study,terrorists do not take hostages. inflation remains low. 8.Do you believe the traditional or the Ricardian view of government debt?Why? 8.Which view of government debt you hold depends on how you think consumers behave. If you hold the traditional view,then you believe that a debt-financed tax cut stimulates consumer spending and lowers national saving.You might believe this for several reasons.First,consumers may be shortsighted or irrational,so that they think their permanent income has increased even though it has not.Second,consumers may face binding borrowing constraints,so that they are only able to consume their current income.Third,consumers may expect that the implied tax liability will fall on future 149generations,and these consumers may not care enough about their children to leav them a bequest to offset this tax liability. If you hold the Ricardian view,then you believe that the preceding objections are not important.In particular,you believe that consumers have the foresight to see that government borrowing today implies future taxes to be levied on them or their descendants.Hence,a debt-financed tax cut gives consumers transitory income that eventual ly will be taken back.As a result,consumers will save the extra income they receive in order to offset that future tax liability. 9.The cyclically adjusted budget deficit is the budget deficit corrected for the effects of the business cycle. In other words,it is the budget deficit that the government would be running if unemployment were at the natural rate.(It is also called the full-employment budget deficit.)Some economists have proposed the rule that the cyclically adjusted budget deficit always be balanced.Compare this proposal to a strict balanced-budget rule.Which is preferable?What problems do you see with the rule requiring a balanced cyclically adjusted budget? 9.A rule requiring a cyclically adjusted balanced budget has the potential to overcome, at least partially,the first two objections to a balanced-budget rule that were raised in this chapter.First,this rule allows the government to run countercyclical fiscal policy in order to stabilize the economy.That is,the government can run deficits during recessions,when taxes automatically fall and expenditures automatically rise. These automatic stabilizers affect the deficit but not the cyclically adjusted deficit. Second,this rule allows the government to smooth tax rates across years whenincome is especially low or high—it is not necessary to raise tax rates in recessions or to cut them in booms
On the other hand his rul on patially these two,since the govemment can only run a deficit of a certain size,which might not be big enough Also.a cyclically ad justed balanced budget does not allow the government to smooth tax rates across years when expenditure is especially high or low,as in times of war or peace.(We might take account of this by allowing an exemption from the balanced budget rule in special circumstances such as war.)This rule does not allow the governmen t to overcome the third objectio raised in the chapter,since the government cannot shift the burden of expenditure from one generation to anothe when this is warranted.Finally,a serious problem with a rule requiring a balanced cyclically adjusted budget is that we do not directly observe this budget.That is,we need to estimate how far we are from full employment,then we need to estimate how taxes tthis full-employment of these estimates can be made precisely 10.List four reasons firms might hold inventories. 10.Reasons why firms might hold inventories include ing.A firm may hold inventories to smooth the level of produc. tion over time.Rather than adjust production to match fluctuations in sales,it may be cheaper to produce goods at a constant rate Hence the firm increases inventories when sales are low and decreases them when sales are high. b.Inventories as a factor of production.Holding inventories may allow a fimm to nore efficier mple,a retail store may hold ntories so that it acturing fimm may hold inventories of spare parts to reduce the time an assembly line is shut down when a machine breaks c.Stock-out avoidance A firm may hold inventories to avoid running out of goods when sales are ectedly high.Firms often ha e to make productiondec before knowing how much customers will dema Ifdema and exc s prod and there are no inventories,the good will be out of stock for a period,and the firm will lose sales and profit. d.Work in process Many goods require a number of steps in production and,there- oahelmeneTntoWhenaeinmoptieyimihodscoapo nents are nted s part of a f
On the other hand,this rule only partially overcomes these two objections,since the government can only run a deficit of a certain size,which might not be big enough. Also,a cyclically adjusted balanced budget does not allow the government to smooth tax rates across years when expenditure is especially high or low,as in times of war or peace.(We might take account of this by allowing an exemption from the balanced budget rule in special circumstances such as war.)This rule does not allow the government to overcome the third objection raised in the chapter,since the government cannot shift the burden of expenditure from one generation to another when this is warranted. Finally,a serious problem with a rule requiring a balanced cyclically adjusted budget is that we do not directly observe this budget.That is,we need to estimate how far we are from full employment;then we need to estimate how expenditures and taxes would differ if we were at this full-employment level.None of these estimates can be made precisely. 10. List four reasons firms might hold inventories. 10.Reasons why firms might hold inventories include: a.Production smoothing.A firm may hold inventories to smooth the level of production over time.Rather than adjust production to match fluctuations in sales,it may be cheaper to produce goods at a constant rate.Hence,the firm increases inventories when sales are low and decreases them when sales are high. b.Inventories as a factor of production.Holding inventories may allow a firm to operate more efficiently.For example,a retail store may hold inventories so that it always has goods available to show customers.A manufacturing firm may hold inventories of spare parts to reduce the time an assembly line is shut down when a machine breaks. c.Stock-out avoidance.A firm may hold inventories to avoid running out of goods when sales are unexpectedly high.Firms often have to make production decisions before knowing how much customers will demand.If demand exceeds production and there are no inventories,the good will be out of stock for a period,and the firm will lose sales and profit. d.Work in process.Many goods require a number of steps in production and,therefore,take time to produce.When a product is not completely finished,its components are counted as part of a firm’s inventory