海南大学2007-08学年度第2学期《宏观经济学》答案(B卷) Please answer the Questions（每题10分，共同100分) 1.Explain the difference between macroeconomics and microeconomics.How are these two fields related? 1.Microeconomics is the study of how individual firms and households mak decisions,and how they interact with one another.Microeconomic models of firms and households are based on principles of optimization-firms and households do the best they can given the constraints they face. For example,households choose which goods to purchase in order to ize their utilty,hereas firms decide how much to produce maximize profits.In contrast,macroeconomics is the study of the economy as a whole;it focuses on issues such as how total output,total employment,and the overall price level are determined.These economy-wide variables are based on the interaction of many households and many firms;therefore,microeconomics forms the basis for macroeconomics 2.What is a market-clearing model?When is the assumption of market clearing appropriate? 2.A market-clearing model is one in which prices adjust to equilibrate supph demand.Market-cearing modelsare useful in situations where prices flexible.Yet in many situations,flexible prices may not be a realistic assumption. For example,labor contracts often set wages for up to three years.Or,firms such as magazine publishers change their prices only every three to four years. Most m mists believe that price umption for studying long-run issues. demand or supply,even though in the short run they may be slow to adjust. 3.Look at the newspapers for the past few days.What new economic statistics have been released?How do you interpret these statistics? 3.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 Un 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(CPD)-a measure of the average price that
海南大学 2007-08 学年度第 2 学期《宏观经济学》答案(B 卷) Please answer the Questions（每题 10 分，共同 100 分） 1.Explain the difference between macroeconomics and microeconomics.How are these two fields related? 1.Microeconomics is the study of how individual firms and households make decisions, and how they interact with one another.Microeconomic models of firms and households are based on principles of optimization—firms and households do the best they can given the constraints they face. For example,households choose which goods to purchase in order to maximize their utility,whereas firms decide how much to produce in order to maximize profits. In contrast,macroeconomics is the study of the economy as a whole; it focuses on issues such as how total output,total employment,and the overall price level are determined.These economy-wide variables are based on the interaction of many households and many firms;therefore,microeconomics forms the basis for macroeconomics. 2.What is a market-clearing model?When is the assumption of market clearing appropriate? 2.A market-clearing model is one in which prices adjust to equilibrate supply and demand.Market-clearing models are useful in situations where prices are flexible.Yet in many situations,flexible prices may not be a realistic assumption. For example, labor contracts often set wages for up to three years.Or,firms such as magazine publishers change their prices only every three to four years. Most macroeconomists believe that price flexibility is a reasonable assumption for studying long-run issues. Over the long run,prices respond to changes in demand or supply,even though in the short run they may be slow to adjust. 3. Look at the newspapers for the past few days. What new economic statistics have been released? How do you interpret these statistics? 3.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 The Trade Balance-the difference between the value of goods exported abroad and the value of goods imported from abroad. 4.Use the neoclassical theory of distribution to predict the impact on the real wage and the ental p eof capital of each of the following events Awave of imm igration increases the lab b.An earthquake destroys some of the capital stock. c.A technological advance improves the production function. 4.a.According to the neoclassical theory of distribution,the real wa equals the I product of labor Because of dim returns to la eabor force causes the marginal product of labor to fae r,an increas wage falls. b.The real rental price equals the marginal product of capital.If an earthquake destroys some of the capital stock(yet miraculously does not kill anyone and lowerthe lab r force),the marginal product of capital rises and,hence,the real rental price rises. c.If a technological advance improves the production function,this is likely to increase the marginal products of both capital and labor.Hence,the real wage and the real rental price both increase. 5.List all the costs f 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: oetsiesr nomin mean that people ant to money bala hold 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 ces.If firms change their prices infrequently then inflation causes greater variability in relative prices.Since 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.Her e,inflation can alter individuals'and firms'tax bilities, fte in ways that lawmaker sdid not in end. 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 eco- nomic transactions.Money is a less useful measure when its value is always changing.There is an additional cost to unexpected inflation:
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. 4. Use the neoclassical theory of distribution to predict the impact on the real wage and the real rental price of capital of each of the following events: a.A wave of immigration increases the labor force. b.An earthquake destroys some of the capital stock. c.A technological advance improves the production function. 4. a. According to the neoclassical theory of distribution, the real wage equals the marginal product of labor. Because of diminishing returns to labor, an increase in thelabor force causes the marginal product of labor to fall.Hence, the real wage falls. b.The real rental price equals the marginal product of capital.If an earthquake destroys some of the capital stock(yet miraculously does not kill anyone and lowerthe labor force), the marginal product of capital rises and, hence, the real rental price rises. c. If a technological advance improves the production function,this is likely to increase the marginal products of both capital and labor. Hence, the real wage and the real rental price both increase. 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:
redistr butes 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.What are the three functions of money?Which of the functions do the followin s satisfy?Which do they not satisfy? a.A credit card b.A painting by Rembrandt c.A subway token 6.Money functions as a store of value,a medium of exchange,and a unit of account a.A credit card can serve as a medium of exchange because it is accepted in exchange for goods and services.A credit card is,arguably,a(negative)store of value because you can accumulate debt with it.A credit card is not a unit of account-a car,for example,does not cost 5 VISA cards. b.A Rembrandt pair ng is a store of value only. c.A subway token,within the subway system,satisfies all three functions of money. Yet outside the subway system,it is not widely used as a unit of account or a medium of exchange,so it is not a form of money. 7.During World War II,bot Ge ermany and England had plan s for a pape weapon:they each printed the other's currency,with the intention of dropping large quantities by airplane.Why might this have been an effective weapon? 7.A paper weapon might have been effective for all the reasons that a nflation is bad.For ex ample. it in creas her and menu costs;it s more variable;it alters tax liabilities i trary ways it increases variability in rela-tive prices:it makes the unit of account less useful;and finally,it increases uncertainty and causes arbitrary redistributions of wealth.If the hyperinflation is sufficiently extreme,it can undermine the public's confidence in th economy and economic policy.Note that if foreign air lanes dropp ed the not re from the resulting inflation,so this benefit usually associated with inflation is lost 8.Describe the evidence that was consistent with Keynes's conjectures and the evidence that was inconsistent with them. 8.The evidence that was consistent with Keynes's conjectures came from studies of household data and short time-series.There were two observations from household data.First,households with higher income consumed more and saved more,implying that the marginal propensity to consume is between zero and one.Second. higher-income households saved a larger fraction of their income than lower-income
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.What are the three functions of money? Which of the functions do the following items satisfy? Which do they not satisfy? a.A credit card b.A painting by Rembrandt c.A subway token 6.Money functions as a store of value,a medium of exchange,and a unit of account. a.A credit card can serve as a medium of exchange because it is accepted in exchange for goods and services.A credit card is,arguably,a(negative)store of value because you can accumulate debt with it.A credit card is not a unit of account—a car,for example,does not cost 5 VISA cards. b.A Rembrandt painting is a store of value only. c.A subway token,within the subway system,satisfies all three functions of money. Yet outside the subway system,it is not widely used as a unit of account or a medium of exchange,so it is not a form of money. 7.During World War II,both Germany and England had plans for a paper weapon: they each printed the other’s currency,with the intention of dropping large quantities by airplane. Why might this have been an effective weapon? 7.A paper weapon might have been effective for all the reasons that a hyperinflation is bad. For example, it increases shoeleather and menu costs; it makes relative prices more variable;it alters tax liabilities in arbitrary ways; it increases variability in rela-tive prices; it makes the unit of account less useful;and finally, it increases uncertainty and causes arbitrary redistributions of wealth. If the hyperinflation is sufficiently extreme,it can undermine the public’s confidence in the economy and economic policy. Note that if foreign airplanes dropped the money,then the government would not receive seigniorage revenue from the resulting inflation,so this benefit usually associated with inflation is lost. 8.Describe the evidence that was consistent with Keynes’s conjectures and the evidence that was inconsistent with them. 8.The evidence that was consistent with Keynes’s conjectures came from studies of household data and short time-series.There were two observations from household data. First,households with higher income consumed more and saved more,implying that the marginal propensity to consume is between zero and one. Second, higher-income households saved a larger fraction of their income than lower-income
households,implying that the average propensity to consume falls with income There were three additional ob servations from short time-series First,in year s wher aggregate income was low,both consumption and saving were low,implying that the marginal propensity to consume is between zero and one.Second in years with low income,the ratio of consumption to income was high,implying that the average propensity to consume falls as income rises.Third,the correlation between income and nsum tior emed gthat no variables other than in med impo in explaining consumption The first piece of evid ence against conjcureame rom the faiurecroaferWorld War thre II Based on the Keynesian consumption function,some economists expected that as income increased over time,the saving rate would also increase;they feared that there might ot beou profitable investment this saving.and the ong depression of indefinite duration.This did not h eoevidence inst Keynes's conjectures came from studes of long er al pper time-series of consumption and income.Simon Kuznets found that the ratio of consumption to income was stable from decade to decade;that is,the average propensity to consume did not seem to be falling over time as income increased. 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 bequ ests to their children,relatives,or charities,so again,they do not dissave all of thei wealth during rem 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 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 examplehaving children raises the bequest motive,but it may also lower the precautionary motive:you can rely on you children in case of financial emergency.Perhaps the two effects on saving cancel each other. 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 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
households, implying that the average propensity to consume falls with income. There were three additional observations from short time-series.First,in years when aggregate income was low,both consumption and saving were low,implying that the marginal propensity to consume is between zero and one.Second,in years with low income,the ratio of consumption to income was high,implying that the average propensity to consume falls as income rises.Third,the correlation between income and consumption seemed so strong that no variables other than income seemed important in explaining consumption. The first piece of evidence against Keynes’s three conjectures came from the failure of“secular stagnation”to occur after World War II.Based on the Keynesian consumption function,some economists expected that as income increased over time,the saving rate would also increase;they feared that there might not be enough profitable investment projects to absorb this saving,and the economy might enter a long depression of indefinite duration.This did not happen. The second piece of evidence against Keynes’s conjectures came from studies of long time-series of consumption and income.Simon Kuznets found that the ratio of consumption to income was stable from decade to decade;that is,the average propensity to consume did not seem to be falling over time as income increased. 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 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. 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 fim 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. tock-out avoidance.A firm may hold inventories toavoid running out of good 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.Man ods require a number of steps in production and,there ketime to produce When a product is not competelyfinished.itsc nents are counted as part of a firm's inventory
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