Download Set #1 - College of Business and Economics

Intermediate Macroeconomics
Spring 2013
Sample Question Set #1
An Overview of Modern Macroeconomics
1.
Define the subject matter of macroeconomics.
2.
Discuss: “In macroeconomics, economists tend to disagree more over theoretical
issues, empirical evidence and the choice of policy instruments than they do over
the ultimate objectives of policy.”
3.
What are the two fundamental issues over which macroeconomists disagree? How
are these two issues intimately connected?
4.
Is the disagreement between Cochrane and Krugman over theory, evidence, policy
or some combination? Discuss the central issues of the dispute and their
respective positions.
5.
What are “stylized facts”? List the major stylized facts that macroeconomic
theories attempt to explain.
6.
Discuss: “The Great Depression gave birth to modern macroeconomics.”
7.
Briefly discuss the extent and magnitude of the Great Depression. Briefly present
the major arguments concerning “the cause” of the Great Depression.
8.
Discuss: “The New Deal was not a set of pre-determined coherent policies
designed to combat the Great Depression.”
9.
Discuss: “The New Deal ended the Great Depression.”
10. Discuss Keynes’ major theoretical contribution in The General Theory.
11. Discuss: “The common sense conclusion is that Western prosperity in the 25 years
following WWII is due to governments being committed to full employment and
following Keynesian policies.”
12. Discuss: “The post-1945 American economy is less volatile than the pre-1929
American economy.”
13. Discuss: “At the theoretical level, Keynesian economics created schizophrenia in
the way that economics was taught in the 1950s and 1960s.”
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14. Distinguish, by major characteristics, Orthodox Keynesians, Orthodox Monetarists,
New Classicalists, Real Business Cycle economists, and New Keynesians.
15. Discuss: “Traditional macroeconomic models view politicians as exogenous to the
economy; models that view politicians as endogenous can improve our
understanding of how the economy really operates.”
16. Discuss: “Short-run business cycle issues pale in comparison to the issues
surrounding long-run economic growth.”
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