海南大学2006-07学年度第2学期试卷《宏观经济学》答案(4卷) Please answer the Questions（每题10分，共同100分) 1.What do you think are the defining characteristics of a science?Does the study of the economy have these characteristics?Do you think macroeconomics should be called a science?Why or why not? 1.Many philosophers of science believe that the defining characteristic of a science is the use of the scientific method of inquiry to establish stable relationships.Scientists examine data,often provided by controlled experiments,to disprove a ists are more limited in their use of experiments.They canno conduct controlled experiments on the economy;they must rely on the natural course of developments in the economy to collect data.To the extent that economists use the scientific method of inquiry,that is,developing hypotheses and testing them,economics has the characteristics of a science. 2.Consider how each of the following events is likely to affect real GDP.Do you think the change in real GDP reflects a similar change in economic well-being? a.A hurricane in Florida forces Disney World to shut down for a month. b.The discovery of a new easy-to-grow strain of wheat increases farm harvests stility between unions and manag ment sparks a rash of strikes rubout the rcomomy experience fain demand.cuing them to lay off workers. e.Congress passes new environmental laws that prohibit firms from using production methods that emit large quantities of pollution. f.More high-school students dr g.Fathers around the country reduce t of school to take jobs mowing lawns their workweeks to spend more tim with their children. 2.a.Real GDP falls because Disney does not produce any services while it is closed. This corresponds in eonm well-being because the income of workers ad shareholders of Disney falls(the side of the national accounts),and people's consumption of Disney falls(the expenditure side of the national accounts). b.Real GDP rises because the original capital and labor in farm production now produce more wheat.This corresponds to an increase in the economic well-being ofsociety,since pe ople can n sume more wheat(people do not want to consume more wheat,then farmers and farmland can be shifted to producing other goods that society values.) c.Real GDP falls because with fewer workers on the job,firms produce less.This accurately reflects a fall in economic well-being. d.Real GDP falls because the firms that lay off workers produce less.This
海南大学 2006-07 学年度第 2 学期试卷《宏观经济学》答案(A 卷) Please answer the Questions（每题 10 分，共同 100 分） 1.What do you think are the defining characteristics of a science? Does the study of the economy have these characteristics? Do you think macroeconomics should be called a science? Why or why not? 1.Many philosophers of science believe that the defining characteristic of a science is the use of the scientific method of inquiry to establish stable relationships.Scientists examine data,often provided by controlled experiments,to support or disprove a hypothesis. Economists are more limited in their use of experiments. They cannot conduct controlled experiments on the economy;they must rely on the natural course of developments in the economy to collect data.To the extent that economists use the scientific method of inquiry,that is,developing hypotheses and testing them,economics has the characteristics of a science. 2. Consider how each of the following events is likely to affect real GDP.Do you think the change in real GDP reflects a similar change in economic well-being? a.A hurricane in Florida forces Disney World to shut down for a month. b.The discovery of a new,easy-to-grow strain of wheat increases farm harvests. c.Increased hostility between unions and management sparks a rash of strikes. d. Firms throughout the economy experience falling demand,causing them to lay off workers. e. Congress passes new environmental laws that prohibit firms from using production methods that emit large quantities of pollution. f. More high-school students drop out of school to take jobs mowing lawns. g. Fathers around the country reduce their workweeks to spend more time with their children. 2.a.Real GDP falls because Disney does not produce any services while it is closed. This corresponds to a decrease in economic well-being because the income of workers and shareholders of Disney falls(the income side of the national accounts), and people’s consumption of Disney falls(the expenditure side of the national accounts). b.Real GDP rises because the original capital and labor in farm production now produce more wheat.This corresponds to an increase in the economic well-being ofsociety,since people can now consume more wheat.(If people do not want to consume more wheat,then farmers and farmland can be shifted to producing other goods that society values.) c.Real GDP falls because with fewer workers on the job,firms produce less.This accurately reflects a fall in economic well-being. d.Real GDP falls because the firms that lay off workers produce less.This
decreases economic well-being because workers'incomes fall(the income side), and the oods fo people to b (the expe diture side). e.Real GDP is likely to fall,as firms shift toward production methods that produce fewer goods but emit less pollution.Economic well-being,however,may rise.The economy now produces less measured output but more clean air;clean air is nottraded in markets and thus does not show up in measured gDP.but is evertheles od that people value high- chool students go from an activity in which they are not producing market goods and services to one in which they are Economic well-being,however.may decrease.In ideal national accounts attending school would show up as investment because it presumably increases the future invest me t.N hat future】 GDP ma lowe th it would be if the lents stayed in s 100 ince the future work force will be less educated g.Measured real GDP falls because fathers spend less time producing market goods and services.The actual production of goods and services need not have fallen however.Measured production(what the fathers are paid to do)falls but unmeasured produc tion of child-rearing services rises 3.If a 10-percent increase in both capital and labor causes output to increase by less than 10 percent,the production function is said to exhibit decreasing returns to scale.If it causes output to increase by more than 10 percent the production function is said to exhibit increasing returns to scale.Why might ap pr ion exhibit de creasing or i ncreasing returns t to scale? 3.A production function has decreasing returns to scale if an equal percentage increase in all factors of production leads to a smaller percentage increase in output.For example,if we double the amounts of capital and labor,and output less than doubles then the pro duction fu on has de to e and labor.This s may happen if there is a fixed factor such h as land in the production function,and this fixed factor becomes scarce as the economy grows larger.A production function has increasing returns to scale if an equal percentage increase in all factors of production leads to a larger percentage increase in For example,if doubling inputs of capital and labor more than doubles output then the production function has increasing returns to scale.This may happen if specialization of labor becomes greater as population grows.For example,if one worker builds a car,then it takes him a long time because he has to learn many different skills,and he must constantly change tasks and tools;all of this is fairly slow.But if ma orke alize in a particula task an d become very fast at i 4.Who controls the money supply and how? 4.In many countries,a central bank controls the money supply.In the United
decreases economic well-being because workers’incomes fall(the income side), and there are fewer goods for people to buy(the expenditure side). e.Real GDP is likely to fall,as firms shift toward production methods that produce fewer goods but emit less pollution.Economic well-being,however,may rise.The economy now produces less measured output but more clean air;clean air is nottraded in markets and,thus,does not show up in measured GDP,but is nevertheless a good that people value. f.Real GDP rises because the high-school students go from an activity in which they are not producing market goods and services to one in which they are. Economic well-being,however,may decrease.In ideal national accounts,attending school would show up as investment because it presumably increases the future productivity of the worker.Actual national accounts do not measure this type of invest ment.Note also that future GDP may be lower than it would be if the students stayed in school,since the future work force will be less educated. g.Measured real GDP falls because fathers spend less time producing market goods and services.The actual production of goods and services need not have fallen however.Measured production(what the fathers are paid to do)falls,but unmeasured production of child-rearing services rises. 3. If a 10-percent increase in both capital and labor causes output to increase by less than 10 percent, the production function is said to exhibit decreasing returns to scale. If it causes output to increase by more than 10 percent,the production function is said to exhibit increasing returns to scale. Why might a production function exhibit decreasing or increasing returns to scale? 3.A production function has decreasing returns to scale if an equal percentage increase in all factors of production leads to a smaller percentage increase in output. For example, if we double the amounts of capital and labor,and output less than doubles, then the production function has decreasing returns to capital and labor.This may happen if there is a fixed factor such as land in the production function,and this fixed factor becomes scarce as the economy grows larger. A production function has increasing returns to scale if an equal percentage increase in all factors of production leads to a larger percentage increase in output. For example,if doubling inputs of capital and labor more than doubles output, then the production function has increasing returns to scale.This may happen if specialization of labor becomes greater as population grows. For example,if one worker builds a car, then it takes him a long time because he has to learn many different skills, and he must constantly change tasks and tools; all of this is fairly slow. But if many workers build a car,then each one can specialize in a particular task and become very fast at it. 4.Who controls the money supply and how? 4. In many countries,a central bank controls the money supply. In the United
States,the central bank is the Federal Reserv -often called the fed The control of the money supply is called monetary policy.The prin ary way that the Fed controls the money supply is through open-market operations,which involve the purchase or sale of government bonds.To increase the money supply,the Fed uses dollars to buy government bonds from the public,putting more dollars into the hands of the public.To decrease the money supply,the Fed sells some of its government bonds,taking dollars out of the hands of the public 5.List all the costs of inflation you can think of,and rank them according to how important you think they are. 5.Th ected inflation include the following a.Shoe eather costs.Higher in lation means high I interest rate s,which mean that people want to hold lower real money balances.If people hold lower money balances,they must make more frequent trips to the bank to withdraw money.This is inconvenient(and it causes shoes to wear out more quickly). b.Menu costs.Higher inflation induces firms to change their posted pric s more often.This may ostly if they must repri their f menus s and catalogs c.Greater variability in relative prices.If firms change their prices infrequently, then inflation causes greater variability in relative prices.Since free-market economies rely on relative prices to allocate resources efficiently,inflation leads to microeconomic inefficiencies. ed tax liabilities.Ma the effect of inflation.Hence,inflation can alter firms'tax liabilities,often in ways that lawmakers did not intend. e.The inconvenience of a changing price level.It is inconvenient to live in a world with a changing price leveL Money is the vardstick with which we measure eco- omic t ran s.Money is a les useful sure when its value is always cha nging.There n additional co o unexpecte d i nflation f.Arbitrary redistributions of wealth.Unexpected inflation arbitrarily redistributes wealth among individuals.For example,if inflation is higher than expected,debtors gain and creditors lose.Also,people with fixed pensions are hurt because their dollars buy fewergoods. 6Explain different between portfolio and transctions theories of money demand. 6.Portfolio theories of money demand emphasize the role of money as a store of value These theories stress that people hold money in their portfolio because it offers a safe nominal retum.Therefore,portfolio theories suggest that the demand for money depends on the risk and return of money as well as all the other assets that people hold
States, the central bank is the Federal Reserve—often called the Fed.The control of the money supply is called monetary policy. The primary way that the Fed controls the money supply is through open-market operations,which involve the purchase or sale of government bonds. To increase the money supply,the Fed uses dollars to buy government bonds from the public,putting more dollars into the hands of the public.To decrease the money supply,the Fed sells some of its government bonds,taking dollars out of the hands of the public. 5.List all the costs of inflation you can think of, and rank them according to how important you think they are. 5.The costs of expected inflation include the following: a. Shoeleather costs.Higher inflation means higher nominal interest rates,which mean that people want to hold lower real money balances.If people hold lower money balances,they must make more frequent trips to the bank to withdraw money.This is inconvenient(and it causes shoes to wear out more quickly). b. Menu costs.Higher inflation induces firms to change their posted prices more often.This may be costly if they must reprint their menus and catalogs. c. Greater variability in relative prices. If firms change their prices infrequently, then inflation causes greater variability in relative prices.Since free-market economies rely on relative prices to allocate resources efficiently, inflation leads to microeconomic inefficiencies. d. Altered tax liabilities.Many provisions of the tax code do not take into account the effect of inflation.Hence,inflation can alter individuals’and firms’tax liabilities, often in ways that lawmakers did not intend. e.The inconvenience of a changing price level. It is inconvenient to live in a world with a changing price level. Money is the yardstick with which we measure economic transactions. Money is a less useful measure when its value is always changing. There is an additional cost to unexpected inflation: f.Arbitrary redistributions of wealth.Unexpected inflation arbitrarily redistributes wealth among individuals.For example,if inflation is higher than expected, debtors gain and creditors lose.Also,people with fixed pensions are hurt because their dollars buy fewer goods. 6 Explain different between portfolio and transctions theories of money demand. 6.Portfolio theories of money demand emphasize the role of money as a store of value. These theories stress that people hold money in their portfolio because it offers a safe nominal return.Therefore,portfolio theories suggest that the demand for money depends on the risk and return of money as well as all the other assets that people hold
in their portfolios.In addition,the demand for money depends on total wealth because wealth measures the overall size of the porfolio In contrast,transactions theories of money demand stres the role of money as a medium of exchange.These theories stress that people hold money in order to make purchases.The demand for money depends on the cost of holding money(the interestrate)and the benefit(the ease of making transactions).Money demand,therefore. ends atively on the inte st rate and p sitively on inc om 7i what way does the near money complicate the conduct of monetary policy? 7."Near money"refers to nonmonetary assets that have acquired some of the liquid ity of money.For example,it used to be that assets held primarily as a store of value,such as mutual funds,were inconvenient to buy and sell.Today,mutual funds allow depositors to hold ks and bo and make withdrawals simply by writing checks from their accounts.The existence of near money complicates monetary policy by making the demand for money unstable.As a result,velocity of money becomes unstable,and the quantity of money gives faulty signals about aggregate demand. 8.Describe four problems affecting measurement of the government budge deficit. 8.Standard measures of the budget deficit are imperfect measures of fiscal policy for at least four reasons.First,they do not correct for the effects of inflation.The measured deficit should equal the change in the govemment's real debt,not the change in the non nal debt Second,such measures donot offset changes in govemment liabilitie with changes in govemment assets.To measure the govemment's overall indebtedness, we should subtract government assets from government debt Hence the budget deficit should be measured as the change in debt minus the change in assets.Third,standard measures omit some liabilities altogether,such as the pensions of government workers and accumulated future Social Sec urity ben efits.Fourth.they do ect for the effects of the business cycle. 9.One study found that the elderly who do not have children dissave at about the tcae物e predicts? 9.In this chapter,we discussed two explanations for why the elderly do not dissave as rapidly as the life-cvcle model predicts.First because of the possibility of in case they live longer expe d or hav arge me dical bills.Se ond,they ma want to leave bequests to their children,relatives,or charities.so again,they do not dissave all of their wealth during retirement. If the elderly who do not have children dissave at the same rate as the elderly who do have children,this seems to imply that the reason for low dissaving is the
in their portfolios.In addition,the demand for money depends on total wealth because wealth measures the overall size of the portfolio. In contrast,transactions theories of money demand stress the role of money as a medium of exchange.These theories stress that people hold money in order to make purchases.The demand for money depends on the cost of holding money(the interestrate)and the benefit(the ease of making transactions).Money demand,therefore, depends negatively on the interest rate and positively on income. 7 in what way does the existence of near money complicate the conduct of monetary policy? 7.“Near money”refers to nonmonetary assets that have acquired some of the liquidity of money.For example,it used to be that assets held primarily as a store of value,such as mutual funds,were inconvenient to buy and sell.Today,mutual funds allow depositors to hold stocks and bonds and make withdrawals simply by writing checks from their accounts.The existence of near money complicates monetary policy by making the demand for money unstable.As a result,velocity of money becomes unstable, and the quantity of money gives faulty signals about aggregate demand. 8.Describe four problems affecting measurement of the government budget deficit. 8.Standard measures of the budget deficit are imperfect measures of fiscal policy for at least four reasons.First,they do not correct for the effects of inflation.The measured deficit should equal the change in the government’s real debt,not the change in the nominal debt.Second,such measures do not offset changes in government liabilities with changes in government assets.To measure the government’s overall indebtedness, we should subtract government assets from government debt.Hence,the budget deficit should be measured as the change in debt minus the change in assets.Third,standard measures omit some liabilities altogether,such as the pensions of government workers and accumulated future Social Security benefits.Fourth,they do not correct for the effects of the business cycle. 9.One study found that the elderly who do not have children dissave at about the same rate as the elderly who do have children.What might this finding imply about the reason the elderly do not dissave as much as the life-cycle model predicts? 9.In this chapter,we discussed two explanations for why the elderly do not dissave as rapidly as the life-cycle model predicts.First,because of the possibility of unpredictable and costly events,they may keep some precautionary saving as a buffer in case they live longer than expected or have large medical bills.Second,they may want to leave bequests to their children,relatives,or charities,so again,they do not dissave all of their wealth during retirement. If the elderly who do not have children dissave at the same rate as the elderly who do have children,this seems to imply that the reason for low dissaving is the
ecautiona children does not increase desired saving.For example.having children raises the bequest motive,but it may also lower the precautionary motive:you can rely on your children in case of financial emergency.Perhaps the two effects on saving cancel each other 10 What are the three ways in which the federal Reserve can influence the money supply. 10.The Fed influences the money supply through open-market operations,reserve ount rate. and I governn pud uauanos Sknd papaa pays for the bonds increase the monetary base and,therefore,the money supply.If the Fed sells government bonds,the dollars it receives for the bonds reduce the monetary base and therefore the money supply.Reserve requirements are regulations imposed by the Fed that require banks to m ntain a minim um reserve-deposit ratio.A decrease in the reserve requirements lowers the reserve-deposit ratio,which allows banks to make more loans on a given amount of deposits and.therefore.increases the money multiplier and the money supply.The discount rate is the interest rate that the Fed charges banks to borrow money.Banks borrow from the Fed if their reserves fall below the reserve requirements.A decrease in the discount rate makes it less s to b w reserves erefore,banks will be likely to b theeisinereases the monetary base and thereforethe mones row more
precautionary motive;the bequest motive is presumably stronger for people who have children than for those who don’t. An alternative interpretation is that perhaps having children does not increase desired saving.For example,having children raises the bequest motive,but it may also lower the precautionary motive:you can rely on your children in case of financial emergency.Perhaps the two effects on saving cancel each other. 10 What are the three ways in which the federal Reserve can influence the money supply. 10.The Fed influences the money supply through open-market operations,reserve requirements,and the discount rate.Open-market operations are the purchases and sales of government bonds by the Fed.If the Fed buys government bonds,the dollars it pays for the bonds increase the monetary base and,therefore,the money supply.If the Fed sells government bonds,the dollars it receives for the bonds reduce the monetary base and therefore the money supply.Reserve requirements are regulations imposed by the Fed that require banks to maintain a minimum reserve–deposit ratio.A decrease in the reserve requirements lowers the reserve–deposit ratio,which allows banks to make more loans on a given amount of deposits and,therefore,increases the money multiplier and the money supply.The discount rate is the interest rate that the Fed charges banks to borrow money.Banks borrow from the Fed if their reserves fall below the reserve requirements.A decrease in the discount rate makes it less expensive for banks to borrow reserves.Therefore,banks will be likely to borrow more from the Fed;thisincreases the monetary base and therefore the money supply