mists differ from microeconomists because macroeconomists focus on the study of _______. inflation, unemployment, and GDP than in individual markets. market prices than the cost of living. inflation in the United States rather than inflation in Puerto Rico. tariffs than global trade.

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The economy of a hypothetical country has been stable for two or three years with very low unemployment. Wages have been gradually increasing during this time. Now an aggressive policy of increasing tariffs on foreign goods imported into the country results retaliatory actions from the other countries against the country’s products and services. This causes great loss of business in the country and results in significant portion of workers losing their jobs. 1. What kind of economic gap will start to occur (inflationary or recessionary)? 2. What part of the Federal Reserve’s congressional mandate does this scenario trigger (price stability and maximum sustainable employment)? 3. What kind of monetary policy might be helpful to stabilize the economy (expansionary or contractionary)? 4. What specific monetary policy tools does the Federal Reserve have available to use in this scenario? 5. Explain in detail, how should the Federal Reserve use each of these tools to maximize their effect…

Economics Malaysia and the United States trade with each other. The currency in Malaysia is the "ringgit". Currently the exchange rate is approximately 3 ringgit per US dollar. Suppose that the GDP deflator in Malaysia rises relative to the GDP deflator in the United States. Which of the following shifts would we see in the Malaysian forex market? The demand for US dollars would fall. The supply of US dollars would fall. The demand for Malaysian ringgit would rise. The supply of Malaysian ringgit would fall.

Scenario 1: An increase in the unemployment rate to 7.4% has occurred. Inflation has increased causing a decline in consumer spending. Exports have declined by more than $4 billion. This has caused a decrease in GDP by 3.7%.

For each question, explain whether the given statement is true, false or uncertain. Then provide arguments to justify your selection.    Question 1 The world price of oil has fallen recently. For India (which is a net importer of oil), this development will imply that GDP deflator will fall by more than the CPI.   Question 2 On an average, real GDP per capita has grown at a much slower rate in USA than in Japan after the second world war. This is because of much lower levels of GDP per capita in USA than in Japan around the second world war time.   Question 3 Janet, a mother of two, decides to reduce her working hours to spend more time with her children. By itself, assuming everything else being the same, this development has necessarily resulted in a lower quality of life for Janet due to a fall in income (and resultant fall in economic activity as measured by GDP).   Question 4 Workers and employers in economy expected 3% inflation rate for 2015 but actual inflation turns out to be…

Trade Leads to a Convergence of Relative Prices Without trade: • Home equilibrium relative price is equilibrium relative price is • Trade leads to convergence of relative prices. & Foreign • Like the Ricardian model, the Heckscher-Ohlin model predicts a convergence of relative prices with trade. Relative price. of cloth, Pe/Pr (PJPA) (POP) • With trade, the relative price of cloth rises in the relatively labor abundant (home) country and falls in the relatively labor scarce (foreign) country. RD Home R$ Relative quantity of cloth, Q/Q

Measuring Inflation and Unemployment: Around the World Suppose a young chef who recently graduated from culinary school in Cuba looks for work at local restaurants but is unable to find a job. After months of searching, she gives up on securing a traditional job and instead decides to offer cooking classes in her apartment, teaching American tourists how to prepare traditional Cuban dishes. She is unable to secure a license for her business, so she operates on a cash-only basis, not reporting her income to the government. a. While searching for a job in a local restaurant, the chef b. Two months after giving up her job search, the chef c. A year after starting her cooking class, the chef

Increased inflation during the 1970s was due primarily to quizlet a. increased government spending on the Vietnam War and President Johnson's social programs b. decreased government spending on the Vietnam War and President c. Johnson's social programs c. higher oil prices d. none of the above

The natural rate of unemployment is 6%, and the actual unemployment rate is 9%, Okun's coefficient for this country is 3. If the potential GDP this year is 1600 billion Euros, what amount of output was lost due to unemployment?