Midterm Material
What are the 3 types of unemployment?
Structural unemployment
Frictional unemployment
Cyclical unemployment
What does the golden rule level of capital maximize?
Consumption per person/worker
What is the law of motion for capital in an economy with technology growth and population growth?
\Deltak=s*f(k)+(\delta+n+g)k
How does an increase in the money supply affect aggregate demand?
It increases aggregate demand/shifts it to the right
Who won the F1 world driver's championship this past weekend?
Lando Norris
For the labor market to be in equilibrium, the number of jobs found by unemployed workers must equal the number of ________.
Write out the equation showing the above statement.
Job separations (of employed workers)
s*E=f*U
________ believed population growth would only bring poverty in the long run due to limited resources while ________ believed population growth would increase technological growth and productivity in the long run.
Malthus; Kremer
Assume there is a country with technology growth and population growth.
What is the steady state growth rate of:
1. Output per effective worker
2. Output per worker
3. Total output
1. 0
2. g
3. n+g
Why is the long-run aggregate supply curve vertical and the short-run aggregate supply curve horizontal?
Prices are sticky in the short run but flexible in the long run. The slopes reflect this difference.
Which movie out-performed Wicked: For Good in the box office in its first week?
Zootopia 2
If the marginal propensity to consume is 0.7, how much of $200 would consumers be expected to consume (in dollars)?
$140
If a country starts at a level of capital above the golden rule level, what must happen to consumption in the transition to the golden rule level for the current generation then future generations?
And below?
Above: consumption will always be above the initial level; saving needs to decrease.
Below: consumption will be below the initial level for the current generation, but higher than the initial level for future generations.
Write the following statements as equations. The country has population and technology growth:
1.The total capital stock is about 5 times a single year’s GDP
2. 25% of a year’s GDP is used to replace depreciated capital
3.Capital income is about 30% of a year’s GDP
4.The country’s real GDP grows at about 2% a year
1. k=5y
2.
\deltak=0.25y
3. MPK*k=0.45y
4. n+g=0.02
A major semiconductor factory in Taiwan (producing 60% of the world's chips) is destroyed by flooding. Describe how this shock would affect aggregate demand, short run aggregate supply, and/or long run aggregate supply.
The short run aggregate supply curve will shift up, no other curve will be affected.
Which High School Musical movie took place at a country club?
High School Musical 2
Given a working age population of 6,000,000 individuals, 4,500,000 employed individuals, and 100,000 unemployed individuals, find the
1) labor force participation rate
2) unemployment rate
1) 76.67%
2) 2.17%
Let s=0.3, \delta=0.2 , and
f(k)=3k^0.5 . There is no population or technology growth.
What is the law of motion for capital?Find the steady state value of capital.
\Deltak=s*f(k)-\deltak
k=20.25
What is the Golden Rule condition for MPK in an economy with:
1) only population growth
2) both technology and population growth
1)
MPK=n+\delta
2)
MPK=n+\delta+g
1. Describe an example of quantitative easing.
2. Which curve of the AD-AS model does quantitative easing shift?
3. What is the primary cost of quantitative easing?
1. Fed purchasing bonds, anything that increases the money supply
2. Aggregate demand
3. Inflation or higher price levels
Where did I go for my bachelor's degree?
Belmont University (go bruins)
Given the production function below, determine
1) Is this CRS, DRS, or IRS?
2) What are the capital and labor shares of output?
3) What are the marginal products of labor and capital?
Y=K^0.25L^0.75
1) CRS
2) capital: 0.25; labor: 0.75
3)
MPK=0.25K^-0.75L^0.75
MPL=0.75K^0.25L^-0.25
In an economy with only population growth, f(k)=4k^0.7 , \delta=0.1 , n=0.2.
Find the golden rule level of capital per worker.
k=316.4
In an economy with population growth and technology growth:
Suppose
f(k)=4k^0.5 ,
\delta=0.15 , n=0.08, and g=0.03
Find the golden rule level of capital per effective worker.
k=59.17
A major technological breakthrough occurs—AI becomes dramatically more productive, cutting production costs in half across all industries while simultaneously making workers far more efficient.
Draw and explain how this affects AD, SRAS, and LRAS, price level, and output.
AD - shifts right
SRAS - shifts down
LRAS - shifts right
higher production, ambiguous effect on prices
Which US president saved his chances of securing the vice presidency by giving a speech about his dog, Checkers?
Richard Nixon (truly what a guy)