Please explian these concepts of Ricardian Model in your own words (include what formulas/rules apply for each): 1. autarky prices 2. prices where trade occurs 3. Real wages 4. What are other parts of the model besides the three listed above
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Please explian these concepts of Ricardian Model in your own words (include what formulas/rules apply for each):
1. autarky
2. prices where trade occurs
3. Real wages
4. What are other parts of the model besides the three listed above
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- List three of the extensions of the Ricardian model. Explain how each extension differs from the relevant assumptions of the simple Ricardian model.Distinguish between the following concepts as they apply to Elements of Macroeconomics. Give examples to support your answers a. Keynesian School and Classical schoolb. Aggregate Demand and Aggregate SupplyCompare the assumptions of the Heckscher-Ohlin model to that of the Ricardian model.
- Question 1 a) Carefully explain the major differences between the Keynes’ and Fisher’s models ofconsumption.1. (i) Which of the following is not true of the Keynesian model? Select one: A. The wage bargain is struck in terms of money wages. B. An increase in the expected price level would cause labour supply to decline. C. Imperfect information about prices explains fluctuations in output and employment. D. Price expectations are essentially forward-looking. E. An increase in the money wage for a given value of the expected price level would increase labour supply. (ii) Which of the following statement is not true? Select one: A. If money demand is completely interest insensitive, the LM curve is vertical. B. An increase in money demand for speculation shifts the LM schedule to the left. C. In the liquidity trap situation, increments to wealth would be held in the form of money. D. Keynes assumes that investors have a relatively fixed conception of the critical interest. rates E. A shift in the money demand function is also known as a shift in liquidity preference.Compare the effects of a negative demand shock, for example, a decline in autonomous investment, in the Kesnesian and Classical models show the effects of this shock on the level of real income, employment, the price level and the rate of interest in both models Answer this question only by using diagrams.
- Contrast the Keynesian and neoclassical approaches to responding to a recession. Assess how modern macroeconomists might blend elements of each perspective in their economic modeling.Macroeconomic forecasts from different computer models are usually Very different because the models are based on different data sets, different assumptions, and different macroeconomic theories. Very similar because the models use the same data, and standardized assumptions so it does not matter whether a supply-side economist or a Keynesian economist conducts the research. Very similar because the models must conform to high government regulatory standards. About the same because political objectives never conflict with good economic policies. Very different because it is impossible to determine who funded the research.Precautionary saving and prudence The Query to Example 17.2 asks how uncertainty about the future might affect a person's savings decisions. In this problem we explore this question more fully. All of our analysis is based on the simple two-period model in Example 17.1. a. To simplify matters, assume that r= in Equation 17.15. If consumption is certain, this implies that u(c0)=u(c1) or c0=c1. But suppose that consumption in period 1 will be subject to a zero-mean random shock, so that c1=c1p+x, where c1p is planned period- 1 consumption and x is a random variable with an expected value of 0. Describe why, in this context, utility maximization requires u(c0)=E[u(c1)] . b. Use Jensen's inequality (see Chapters 2 and 7 ) to show that this person will opt for c1pc0 , if and only if u is convex-that is, if and only if u0 . c. Kimball" suggests using the term "prudence" to describe a person whose utility function is characterized by u0 . Describe why the results from part (b) show that such a definition is consistent with everyday usage. d. In Example 17.2 we showed that real interest rates in the U.S. economy seem too low to reconcile actual consumption growth rates with evidence on individuals willingness to experience consumption fluctuations. If consumption growth rates were uncertain, would this explain or exacerbate the paradox?
- State algebraically and explain each of the components of the 3-equation model for macroeconomic policy.E. Is unemployment rate a determinant of the murder rate in this data? Answer "YES" or "NO"______________. F. Is the treatment effect statistically significant at the 95% confidence level? That is, did removing the assault weapons ban have a statistically significant effect on the murder rate? Hint: Think about which coefficient we care about in a diff-in-diff set up. Answer "YES" or "NO"._____________. G. Does running this as a two-way fixed effects model make sense? Answer by inputting the number that is associated with the correct statement:______________.COURSE: MACROECONOMICS LEVEL 1 - SOLOW MODEL Justify your answer if it is true, false or uncertain. You may use graphs or models to support your explanations: 1.- According to Robert Solow's model, higher population growth or capital depreciation rate lead to higher GDP per capita in STATIONARY STATE and higher welfare. 2. Consider an economy initially in STATIONARY STATE. Increasing pension contributions in Chile will lead to an increase in GDP per capita and welfare in STATIONARY STATE (related to Solow model).
