... 6. What type of unemployment is caused by a recession?
e. None of the above
7. In the circular flow diagram, which of the following is true in resource (factor) markets?
a. Households buy resources from business firms
b. Households sell products to ...
... country during one year, equal to the gross domestic product
plus the net income from foreign investments
Taylor`s Theorem - Integral Remainder
... Remark In this version, the error term involves an integral. Because of this, we assume
that f k+1 is continuous, whereas previously we only assumed this derivative exists. However,
we get the valuable bonus that this integral version of Taylor’s theorem does not involve
the essentially unknown cons ...
ECON 409 November 7, 2012
... • Along with military expenditures, this contributed
to the abandonment of the gold-dollar system in
Week 6 In Class Productivity and Growth
... 10.When a society decides to increase its quantity of physical capital, the society
a. can avoid the usual need to face trade-offs.
b. is apparently not very concerned about its rate of economic growth in the future.
c. is in effect deciding to consume fewer goods and services in the present.
d. is ...
Natural Rate Hypothesis: 1) Adaptive Expectations Theory 2
... A series of supply shocks shift AS to the left
This result questions the inverse relationship of Unemployment & the Price Level (inflation)
One view is that the economy is stable at a natural rate of unemployment (also the FE of output)
(this is determined by the gov’t.)
There are 2 Variations of ...
Chapter 26 Key Question Solutions
... peak, and recession. As seen in Table 26.1, the length of a complete cycle varies from
about 2 to 3 years to as long as 15 years.
There is a pre-Christmas spurt in production and sales and a January slackening. This
normal seasonal variation does not signal boom or recession. From decade to decade, ...
Economics - APAblog.org
... to work but do not have a job during a given period of
Participation Rate: A measure of the active portion of
an economy's labor force. The participation rate refers
to the number of people who are either employed or
are actively looking for work.
... , where the P’s are values of the GDP
deflator and r is an average of nominal interest rates quoted at the usual annual rate.)
Past Paper - Exam 2012
... economy to show how economic sanctions, which have the effect of
limiting a country’s exports, will ceteris paribus affect a country’s level
of output. If the economy enjoys balanced trade at the time that the
sanctions are introduced, show why the sanctions will result in a trade
HW4 - IS MU
... Show the resulting change in interest rate.
d) Draw a graph similar to the one in part a) to show the effect of open-market operation on
output and the price level.
2. Suppose economists observe that an increase in government spending of $10 billion raises
the total demand for goods and services by ...
... Activity indicators for Q2, especially the PMI
surveys, suggested that the rate of contraction in
the global and UK economies had slowed, and
there were signs of improving business
confidence. There had also been signs that the
second-quarter decline in consumption would be
smaller than the Committe ...
TEN FUNDAMENTAL LAWS OF ECONOMICS Antony P. Mueller I
... The output per hour determines the worker’s wage rate per hour. In a free labor
market, businesses will hire additional workers as long as their marginal
productivity is higher than the wage rate. Competition among the firms will
drive up the wage rate to the point where it matches productivity. The ...
PROBLEM SET 7 Questions 14.02 Principles of Macroeconomics April 29, 2005
... 1. A real depreciation always improves the trade balance.
2. An increase in exports (due for example to an increase in foreign output)
3. Governments should avoid trade de…cits as they always lead to an out‡ow
of foreign capital.
4. If the domestic nominal interest rate and the ex ...
Macroeconomic Policy Exercise set 9 1. Assume the classical
... unchanged by the operation).
1. Derive the past and future path for velocity, real balances and the price level under
the assumption that the policy change is permanent and has not been announced
in advance. Do you envisage any problem for this economy?
2. Suppose that at time t the country announce ...
Cuba at a glance
... Although the Economist Intelligence Unit expects the transfer of power
to be relatively smooth, there is no obvious candidate for the
presidency among the younger generation of politicians. Systemic
changes to the tightly controlled political system are unlikely. The
economic reform process will rem ...
Economic growth - Danica Popović
... One of the main points of Table 3.4 is that the numbers of the population and the
numbers of employed have grown at roughly the same rates over the course of the
twentieth century for these countries, meaning that many trends (people entering
the labour force later, retiring earlier, living longer ...
... Y K G (hL)1 y k g h1 , where y Y / L , k K / L , etc.
Okishio's theorem is a theorem formulated by Japanese economist Nobuo Okishio. It has had a major impact on debates about Marx's theory of value. Intuitively, it can be understood as saying that if one capitalist raises his profits by introducing a new technique that cuts his costs, the collective or general rate of profit in society – for all capitalists – goes up.Okishio  establishes this theorem under the assumption that the real wage – the price of the commodity basket which workers consume – remains constant. Thus, the theorem isolates the effect of 'pure' innovation from any consequent changes in the wage.For this reason the theorem, first proposed in 1961, excited great interest and controversy because, according to Okishio, it contradicts Marx's law of the tendency of the rate of profit to fall. Marx had claimed that the new general rate of profit, after a new technique has spread throughout the branch where it has been introduced, would be lower than before. In modern words, the capitalists would be caught in a rationality trap or prisoner's dilemma: that which is rational from the point of view of a single capitalist, turns out to be irrational for the system as a whole, for the collective of all capitalists. This result was widely understood, including by Marx himself, as establishing that capitalism contained inherent limits to its own success. Okishio's theorem was therefore received in the West as establishing that Marx's proof of this fundamental result was inconsistent.More precisely, the theorem says that the general rate of profit in the economy as a whole will be higher if a new technique of production is introduced in which, at the prices prevailing at the time that the change is introduced, the unit cost of output in one industry is less than the pre-change unit cost. The theorem, as Okishio (1961:88) points out, does not apply to non-basic branches of industry.The proof of the theorem may be most easily understood as an application of the Perron–Frobenius theorem. This latter theorem comes from a branch of linear algebra known as the theory of nonnegative matrices. A good source text for the basic theory is Seneta (1973). The statement of Okishio's theorem, and the controversies surrounding it, may however be understood intuitively without reference to, or in-depth knowledge of, the Perron–Frobenius theorem or the general theory of nonnegative matrices.