海南大学2008-09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.Explain what happens to consumption,investment,and the interest rate when the government increases taxes. 1.When the gov ernment increases taxes,disposable income falls,and therefo 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 ase ve not c d,the decreas mption must be offset by an increase in investment.For in 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. ing to the neoclassical theory of dist ution the real wag ed by any worker equals that worker's marginal productivity.Let's usethisinsight 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 eal wage? b.In what uni ts is the real wage discussed d 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)measured? mers and being barbers. cal move frecly between being fardb obility imply for th ages of fa 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? 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()is measured in terms of haireuts.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
海南大学 2008-09 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.Explain what happens to consumption, investment, and the interest rate when the government increases taxes. 1.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. 2.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)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? 2. 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. 3.List all the costs of inflation you can think of,and rank them according to how important you think they are. 3.The costs of expected inflation include the following: a.Shoeleather costs.Higher inflation means higher nominal interest rates.which mean that peopl want to hold oweeal money balances.If peopl hol owe 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 inflatio causes greater variabilit yin relative prices.Si ce free-marke 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 ties, of in ways that a wmakers did not intend. e.The inconvenienee 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 eco- nomic transactions.Money is a less useful measure when its value is always f.Arbit redstnibutionsofwcalh.Uncxpectedinfationabitrarit changing.There is an additional cost to unexpected inflation: redistribute viduals.For example,if in on is higher than expected,debtors gain and creditors lose.Also,people with fixed pensions are hurt because their dollars buy fewer goods. balances depend on the nominal interest rate,then an increase in the rate of money growth affects consumption,investment,and the real interest rate.Does the nominal interest rate adjust more than one-for-one or less than one-for-one to cted inflation?This de iatio m the classical dichoto and the Fisher "Mu Tobin effect."How might you decide whether the Mundel-Tobin effect is important in practice? 4.An increase in the rate of money growth leads to an increase in the rate of inflation.Inflation,in turn,causes the nominal interest rate to rise,which means
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. 3.List all the costs of inflation you can think of, and rank them according to how important you think they are. 3.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. 4. Suppose that consumption depends on the level of real money balances (on the grounds that real money balances are part of wealth). Show that if real money balances depend on the nominal interest rate,then an increase in the rate of money growth affects consumption, investment, and the real interest rate. Does the nominal interest rate adjust more than one-for-one or less than one-for-one to expected inflation? This deviation from the classical dichotomy and the Fisher effect is called the“Mundell–Tobin effect.”How might you decide whether the Mundell–Tobin effect is important in practice? 4.An increase in the rate of money growth leads to an increase in the rate of inflation. Inflation,in turn,causes the nominal interest rate to rise,which means
that the opportunity cost of holding money increases.as a result.real money balances fal.Since money s part of wealth,real wealth also falls.A fall in wealth reduces consumption,and,therefore,increases saving.The increa in saving lead to an outward shift of the saving schedule,as in Figure 4-1.This leads to a lower real interest rate. The classical dichotomy states that a change in a nominal variable such as inflation does not affect eal variables.In this case,the classical dichotomy does not hold;the the rate of inflatio to a d cre se in the real interest rate.The Fisher effect states that i=r+n.In this case,since the real interest rate r falls.a 1-percent increase in inflation increases the nominal interest rate i by less than 1 percent. 5.Give three quilibrates labor supply and may remain above the level f 5.The real wage may remain above the level that equilibrates labor supply and labor demand because of minimum wage laws,the monopoly power of unions,and es.Minimu law age rigidi when they prevent wages from falling to cquilibrium levels.Although most workers are paid awag above the minimum level,for some workers,especially the unskilled and inexperienced,the minimum wage raises their wage above the equilibrium level.It therefore reduces the quantity of their labor that firms demand,and an excess supply of workersthat employment-results.The opoly power of unions cause wage rigidity because the wages of unio orkers determined not by the equilibrium of supply and demand but by collective bargaining between union leaders and firm management.The wage agreement often raises the wage above the equilibrium level and allows the firm to decide howmany workers to employ.These high wages cause firms to hire fewer workers than at the e m rket-clearing wage. wait unemplo rease Efficiency-wage theories suggest that high wages make workers more productive The influence of wages on worker efficiency may explain why firms do not cut wages despite an excess supply of labor.Even though a wage reduction decreases the firm's wage bill,it may also lower worker productivity and therefore the firm's profits. 6.Explain why changes in consumption are unpredictable if consumers obey the permanent-income hypothesis and have rational expectations. 6.The permanent-income hypothesis implies that consumers try to smooth over tim 、hal consumption is based expect ion about lifetime income.It follows that changes in consumption"about lifetime income.If consumers have rational expectations,then these surprises are unpredictable.Hence,consumption changes are also unpredictable
that the opportunity cost of holding money increases.As a result,real money balances fall. Since money is part of wealth,real wealth also falls.A fall in wealth reduces consumption, and,therefore,increases saving.The increase in saving leads to an outward shift of the saving schedule,as in Figure 4–1.This leads to a lower real interest rate. The classical dichotomy states that a change in a nominal variable such as inflation does not affect real variables.In this case,the classical dichotomy does not hold; the increase in the rate of inflation leads to a decrease in the real interest rate.The Fisher effect states that i=r+π.In this case,since the real interest rate r falls,a 1-percent increase in inflation increases the nominal interest rate i by less than 1 percent. 5.Give three explanations why the real wage may remain above the level that equilibrates labor supply and labor demand. 5. The real wage may remain above the level that equilibrates labor supply and labor demand because of minimum wage laws,the monopoly power of unions,and efficiency wages. Minimum-wage laws cause wage rigidity when they prevent wages from falling to equilibrium levels.Although most workers are paid a wage above the minimum level, for some workers,especially the unskilled and inexperienced,the minimum wage raises their wage above the equilibrium level.It therefore reduces the quantity of their labor that firms demand,and an excess supply of workers—that is,unemployment—results. The monopoly power of unions causes wage rigidity because the wages of unionized workers are determined not by the equilibrium of supply and demand but by collective bargaining between union leaders and firm management. The wage agreement often raises the wage above the equilibrium level and allows the firm to decide howmany workers to employ.These high wages cause firms to hire fewer workers than at the market-clearing wage,so wait unemployment increases. Efficiency-wage theories suggest that high wages make workers more productive. The influence of wages on worker efficiency may explain why firms do not cut wages despite an excess supply of labor.Even though a wage reduction decreases the firm’s wage bill,it may also lower worker productivity and therefore the firm’s profits. 6.Explain why changes in consumption are unpredictable if consumers obey the permanent-income hypothesis and have rational expectations. 6.The permanent-income hypothesis implies that consumers try to smooth consumption over time,so that current consumption is based on current expectations about lifetime income.It follows that changes in consumption reflect“surprises”about lifetime income.If consumers have rational expectations,then these surprises are unpredictable. Hence,consumption changes are also unpredictable
7.One study found that the elderly who do not have children dissave at about the same rate as the erly who do have children.What might this finding impl about the reason the elderly do not dissave as much as the life-cycle model predicts? 7.In this chapter,we discussed two explanations for why the elderly do not dissave as rapidly a 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. Ifthe elderly who do not have children dissave at the same rate as the elderly who do have children,this seems to imply that the re son for low dissaving is the 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 p motive:you can rely on your chil ren in case of financial emergency.Perhaps the two effects on saving cancel each othe 8.In the neoclassical model of business fixed investment,under what conditions will firms find it profitable to add to their capital stock 8.Inthe neoclassical model of business fixed investment,firms will find it profitable to add to their capital stock if the real rental price of capital is greater than the cost of capital.The real rental price depends on the marginal product of capital,whereas the cost of capital depends on the real interest rate the depreciation rate and the relative price of capital goods. 9.List four reasons firms might hold inventories. 9.Reasons why firms might hold inventories include: a.Production smoothing.A firm may hold inventories to smooth the level of produc. tion over time.Rather tuationsi ales it may be cheaper to produce goods at a constant rate.Hence,the firm in 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 ods available to she mers.Ar hold inventories of spare parts to reduce the time an assembly line shut down wher 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
7.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? 7.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 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. 8.In the neoclassical model of business fixed investment, under what conditions will firms find it profitable to add to their capital stock 8.In the neoclassical model of business fixed investment,firms will find it profitable to add to their capital stock if the real rental price of capital is greater than the cost of capital.The real rental price depends on the marginal product of capital,whereas the cost of capital depends on the real interest rate,the depreciation rate,and the relative price of capital goods. 9. List four reasons firms might hold inventories. 9.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 nd profit. fore,take time to produce.When a product is not completely finished,its compo- nents are counted as part of a firm's inventory. 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 goverment bonds by the Fed.If the Fed buys govemment bonds,the dollars it etary base and,therefo nollr空thnd网the mone网 e, he money supply.If the 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 on a given a of deposit multiplier and the money supply.The discount rate is the interest rate that the Fd 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 this increases the monetary base and therefore the money supply
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. 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