曼昆宏观经济学课后答案(英文版)

23章

SOLUTIONSTOTEXTPROBLEMS:

QuickQuizzes:

1.Grossdomesticproductmeasurestwothingsatonce:(1)thetotalincomeofeveryone

intheeconomy;and(2)thetotalexpenditureontheeconomy'soutputofgoodsand

services.Itcanmeasurebothofthesethingsatoncebecauseincomemustequal

expenditurefortheeconomyasawhole.

2.TheproductionofapoundofcaviarcontributesmoretoGDPthantheproductionofa

poundofhamburgerbecausethecontributiontoGDPismeasuredbymarketvalueand

thepriceofapoundofcaviarismuchhigherthanthepriceofapoundofhamburger.

3.Thefourcomponentsofexpenditureare:(1)consumption;(2)investment;(3)

governmentpurchases;and(4)netexports.Thelargestcomponentisconsumption,

whichaccountsformorethantwo-thirdsoftotalexpenditure.

4.NominalGDPistheproductionofgoodsandservicesvaluedatcurrentprices.Real

GDPistheproductionofgoodsandservicesvaluedatconstantprices.RealGDPisa

bettermeasureofeconomicwell-beingbecauseitreflectstheeconomy'sabilitytosatisfy

people'sneedsanddesires.ThusariseinrealGDPmeanspeoplehaveproducedmore

goodsandservices,butariseinnominalGDPcouldoccureitherbecauseofincreased

productionorbecauseofhigherprices.

5.AlthoughGDPisnotaperfectmeasureofwell-being,policymakersshouldcareaboutit

becausealargerGDPmeansthatanationcanaffordbetterhealthcare,bettereducational

systems,andmoreofthematerialnecessitiesoflife.

QuestionsforReview:

1.Aneconomy'sincomemustequalitsexpenditure,sinceeverytransactionhasabuyerand

aseller.Thus,expenditurebybuyersmustequalincomebysellers.

2.TheproductionofaluxurycarcontributesmoretoGDPthantheproductionofan

economycarbecausetheluxurycarhasahighermarketvalue.

3.ThecontributiontoGDPis$3,themarketvalueofthebread,whichisthefinalgoodthat

issold.

4.ThesaleofusedrecordsdoesnotaffectGDPatallbecauseitinvolvesnocurrent

production.

5.ThefourcomponentsofGDPareconsumption,suchasthepurchaseofamusicCD;

investment,suchasthepurchaseofacomputerbyabusiness;governmentpurchases,

suchasanorderformilitaryaircraft;andnetexports,suchasthesaleofAmericanwheat

toRussia.

6.EconomistsuserealGDPratherthannominalGDPtogaugeeconomicwell-being

becauserealGDPisnotaffectedbychangesinprices,soitreflectsonlychangesinthe

amountsbeingproduced.IfnominalGDPrises,youdonotknowifthatisbecauseof

increasedproductionorhigherprices.

7.

YearNominalGDPRealGDPGDPDeflator

2001100X$2=$200100X$2=$200($200/$200)X100=100

2002200X$3=$600200X$2=$400($600/$400)X100=150

ThepercentagechangeinnominalGDPis(600-200)/200x100=200%,The

percentagechangeinrealGDPis(400-200)/200x100=100%.Thepercentagechange

inthedeflatoris(150-100)/100x100=50%.

8.ItisdesirableforacountrytohavealargeGDPbecausepeoplecouldenjoymoregoods

andservices.ButGDPisnottheonlyimportantmeasureofwell-being.Forexample,

lawsthatrestrictpollutioncauseGDPtobelower.Iflawsagainstpollutionwere

eliminated,GDPwouldbehigherbutthepollutionmightmakeusworseoff.Or,for

example,anearthquakewouldraiseGDP,asexpendituresoncleanup,repair,and

rebuildingincrease.Butanearthquakeisanundesirableeventthatlowersourwelfare.

ProblemsandApplications:

1.a.Consumptionincreasesbecausearefrigeratorisagoodpurchasedbya

household.

b.Investmentincreasesbecauseahouseisaninvestmentgood.

c.Consumptionincreasesbecauseacarisagoodpurchasedbyahousehold,but

investmentdecreasesbecausethecarinFord'sinventoryhadbeencountedasan

investmentgooduntilitwassold.

d.Consumptionincreasesbecausepizzaisagoodpurchasedbyahousehold.

e.Governmentpurchasesincreasebecausethegovernmentspentmoneytoprovide

agoodtothepublic.

f.Consumptionincreasesbecausethebottleisagoodpurchasedbyahousehold,

butnetexportsdecreasebecausethebottlewasimported.

g.Investmentincreasesbecausenewstructuresandequipmentwerebuilt.

2.Withtransferpayments,nothingisproduced,sothereisnocontributiontoGDP.

3.PurchasesofnewhousingareincludedintheinvestmentportionofGDPbecausehousing

providesservicesforalongtime.Forthesamereason,purchasesofnewcarscouldbe

thoughtofasinvestment,butbyconvention,theyarenot.Thelogiccouldapplytoany

durablegood,suchashouseholdappliances.

4.IfGDPincludedgoodsthatareresold,itwouldbecountingoutputofthatparticularyear,

plussalesofgoodsproducedinapreviousyear.Itwoulddouble-countgoodsthatwere

soldmorethanonceandwouldcountgoodsinGDPforseveralyearsiftheywere

producedinoneyearandresoldinanother.

5.a.CalculatingnominalGDP:

2001:($1perqt.ofmilkx100qts.milk)+($2perqt.ofhoneyx50qts.honey)

=$200

2002:($1perqt.ofmilkx200qts.milk)+($2perqt.ofhoneyx100qts.

honey)=$400

2003:($2perqt.ofmilkx200qts.milk)+($4perqt.ofhoneyx100qts.

honey)=$800

CalculatingrealGDP(baseyear2001):

2001:($1perqt.ofmilkx100qts.milk)+($2perqt.ofhoneyx50qts.honey)

=$200

2002:($1perqt.ofmilkx200qts.milk)+($2perqt.ofhoneyx100qts.

honey)=$400

2003:($1perqt.ofmilkx200qts.milk)+($2perqt.ofhoneyx100qts.

honey)=$400

CalculatingtheGDPdeflator:

2001:($200/$200)x100=100

2002:($400/$400)x100=100

2003:($800/$400)x100=200

b.CalculatingthepercentagechangeinnominalGDP:

PercentagechangeinnominalGDPin2002=[($400-$200)/$200]x100=

100%.

PercentagechangeinnominalGDPin2003=[($800-$400)/$400]x100=

100%.

CalculatingthepercentagechangeinrealGDP:

PercentagechangeinrealGDPin2002=[($400-$200)/$200|x100=100%.

PercentagechangeinrealGDPin2003=[($400-$400)/$400|x100=0%.

CalculatingthepercentagechangeieGDPdeflator:

PercentagechangeintheGDPdeflatorin2002=[(100-100)/100]x100=0%.

PercentagechangeintheGDPdeflatorin2003=[(200-100)/100]x100=

100%.

Pricesdidnotchangefrom2001to2002.Thus,thepercentagechangeinthe

GDPdeflatoriszero.Likewise,outputlevelsdidnotchangefrom2002to2003.

ThismeansthatthepercentagechangeinrealGDPiszero.

c.Economicwell-beingrosemorein2002thanin2003,sincerealGDProsein

2002butnotin2003.In2002,realGDProseandpricesdidn't.In2003,real

GDPdidn'triseandpricesdid.

6.

YearNominalGDPGDPDeflator(base

(billions)year:1996)

2000$9,873118

1999$9,269113

a.ThegrowthrateofnominalGDPis($9,873-$9,269)/$9,269x100%=6.5%.

b.Thegrowthrateofthedeflatoris(118-113)/113x100%=4.4%.

c.RealGDPin1999(in1996dollars)is$9,269/(113/100)=$8,203.

d.RealGDPin2000(in1996dollars)is$9,873/(118/100)=$8,367.

e.ThegrowthrateofrealGDPis($8,367-$8,203)/$8,203x100%=2.0%.

f.ThegrowthrateofnominalGDPishigherthanthegrowthrateofrealGDP

becauseofinflation.

7.Economistsignoretheriseinpeople'sincomesthatiscausedbyhigherpricesbecause

althoughincomesarehigher,thepricesofthegoodsandservicesthatpeoplebuyarealso

higher.Therefore,theywillnotnecessarilybeabletopurchasemoregoodsandservices.

Forthisreason,economistsprefertolookatrealGDPinsteadofnominalGDP.

8.Manyanswersarepossible.

9.GDPequalsthedollaramountBarrycollects,whichis$400.

b.NNP=GDP-depreciation=$400-$50=$350.

c.Nationalincome=NNP-salestaxes=$350-$30=$320.

d.Personalincome=nationalincome-retainedearnings=$320-$100=$220.

e.Disposablepersonalincome=personalincome-personalincometax=$220-

$70=$150.

10.IncountrieslikeIndia,peopleproduceandconsumeafairamountoffoodathomethatis

notincludedinGDP.SoGDPperpersoninIndiaandtheUnitedStateswilldifferby

morethantheircomparativeeconomicwell-being.

11.IfthegovernmentcaresaboutthetotalincomeofAmericans,itwillemphasizeGNP,

sincethatmeasureincludestheincomeofAmericansthatisearnedabroadandexcludes

theincomeofforeigners.Ifthegovernmentcaresaboutthetotalamountofeconomic

activityoccurringintheUnitedStates,itwillemphasizeGDP,whichmeasuresthelevel

ofproductioninthecountry,whetherproducedbydomesticcitizensorforeigners.

12.a.Theincreasedlabor-forceparticipationofwomenhasincreasedGDPinthe

UnitedStates,sinceitmeansmorepeopleareworkingandproductionhas

increased.

b.Ifourmeasureofwell-beingincludedtimespentworkinginthehomeandtaking

leisure,itwouldn'triseasmuchasGDP,sincetheriseinwomen'slabor-force

participationhasreducedtimespentworkinginthehomeandtakingleisure.

c.Otheraspectsofwell-beingthatareassociatedwiththeriseinwomen'sincreased

labor-forceparticipationincludeincreasedself-esteemandprestigeforwomenin

theworkforce,especiallyatmanageriallevels,butdecreasedqualitytimespent

withchildren,whoseparentshavelesstimetospendwiththem.Suchaspects

wouldbequitedifficulttomeasure.

24章

SOLUTIONSTOTEXTPROBLEMS:

QuickQuizzes

1.Theconsumerpriceindextriestomeasuretheoverallcostofthegoodsandservices

boughtbyatypicalconsumer.Itisconstructedbysurveyingconsumerstofixabasket

ofgoodsandservicesthatthetypicalconsumerbuys,findingthepricesofthegoodsand

servicesovertime,computingthecostofthebasketatdifferenttimes,andthenchoosing

abaseyear.Tocomputetheindex,wedividethecostofthemarketbasketinthecurrent

yearbythecostofthemarketbasketinthebaseyearandmultiplyby100.

2.SinceHenryFordpaidhisworkers$5adayin1914andtheconsumerpriceindexwas10

in1914and177in2001,thentheFordpaycheckwasworth$5x177/10=$88.50aday

in2001dollars.

QuestionsforReview

1.A10percentincreaseinthepriceofchickenhasagreatereffectontheconsumerprice

indexthana10percentincreaseinthepriceofcaviarbecausechickenisabiggerpartof

theaverageconsumer'smarketbasket.

2.Thethreeproblemsintheconsumerpriceindexasameasureofthecostoflivingare:

(1)substitutionbias,whicharisesbecausepeoplesubstitutetowardgoodsthathave

becomerelativelylessexpensive;(2)theintroductionofnewgoods,whicharenot

reflectedquicklyintheCPI;and(3)unmeasuredqualitychange.

3.IfthepriceofaNavysubmarinerises,thereisnoeffectontheconsumerpriceindex,

sinceNavysubmarinesarenotconsumergoods.ButtheGDPpriceindexisaffected,

sinceNavysubmarinesareincludedinGDPasapartofgovernmentpurchases.

4.Sincetheoverallpriceleveldoubled,butthepriceofthecandybarrosesixfold,thereal

price(thepriceadjustedforinflation)ofthecandybartripled.

5.Thenominalinterestrateistherateofinterestpaidonaloanindollarterms.Thereal

interestrateistherateofinterestcorrectedforinflation.Therealinterestrateisthe

nominalinterestrateminustherateofinflation.

ProblemsandApplications

1.a.Thepriceoftennisballsincreases0percent;thepriceoftennisracquets

increases50percent[=($60-$40)/$40x100%];thepriceofGatoradeincreases

100percent[=($2-$1)/$1x100%].

Tofindthepercentagechangeintheoverallpricelevel,followthesesteps:

1)Determinethefixedbasketofgoods:100balls,10racquets,200

Gatorades

2)Findthepriceofeachgoodineachyear:

YearBallsRacquetsGatorade

2001$2$40$1

2002$2$60$2

3)Computethecostofthebasketofgoodsineachyear:

2001:(100x$2)+(10x$40)+(200x$1)=$800

2002:(100x$2)+(10x$60)+(200x$2)=$1,200

4)Chooseoneyearasabaseyear(2001)andcomputetheCPIineach

year:

2001:$800/$800x100=100

2002:$l,200/$800x100=150

5)UsetheCPItocomputetheinflationratefromthepreviousyear:

2002:(150-100)/100x100%=50%

b.TennisracquetsarelessexpensiverelativetoGatorade,sincetheirpricerose50

percentwhilethepriceofGatoraderose100percent.Thewell-beingofsome

peoplechangesrelativetothewell-beingofothers.Thosewhopurchasealot

ofGatoradebecomeworseoffrelativetothosewhopurchasealotoftennis

racquetsortennisballs.

2.Tofindthepercentagechangeintheoverallpricelevel,followthesesteps:

a.Determinethefixedbasketofgoods:100headsofcauliflower,50bunchesof

broccoli,500carrots.

b.Findthepriceofeachgoodineachyear:

YearCauliflowerBroccoliCarrots

2001$2$1.50$0.10

2002$3$1.50$0.20

c.Computethecostofthebasketofgoodsineachyear:

2001:(100x$2)+(50x$1.50)+(500x$.10)=$325

2002:(100x$3)+(50x$1.50)+(500x$.20)=$475

d.Chooseoneyearasabaseyear(2001)andcomputetheCPIineachyear:

2001:$325/$325x100=100

2002:$475/$325x100=146

UsetheCPItocomputetheinflationratefromthepreviousyear:

2002:(146-100)/100x100%=46%

3.Manyanswersarepossible.

4.a.Sincetheincreaseincostwasconsideredaqualityimprovement,therewasno

increaseregisteredintheCPI.

b.Theargumentinfavorofthisisthatconsumersaregettingabettergoodthan

before,sothepriceincreaseequalstheimprovementinquality.Theproblemis

thattheincreasedcostmightexceedthevalueoftheimprovementinairquality,

soconsumersareworseoff.Inthiscase,itwouldbebetterfortheCPItoat

leastpartiallyreflectthehighercost.

5.a.introductionofnewgoods;b.unmeasuredqualitychange;c.substitutionbias;d.

unmeasuredqualitychange;e.substitutionbias

6.a.($0.75-$0.15)/$0.15x100%=400%.

b.($14.26-$3.36)/$3.36x100%=324%.

c.In1970:$.15/($3.36/60)=2.7minutes.In2000:$.75/($14.26/60)=3.2

minutes.

d.Workers'purchasingpowerfellintermsofnewspapers.

7.a.Iftheelderlyconsumethesamemarketbasketasotherpeople,SocialSecurity

wouldprovidetheelderlywithanimprovementintheirstandardoflivingeach

yearbecausetheCPIoverstatesinflationandSocialSecuritypaymentsaretiedto

theCPI.

b.Sincetheelderlyconsumemorehealthcarethanyoungerpeople,andsince

healthcarecostshaverisenfasterthanoverallinflation,itispossiblethatthe

elderlyareworseoff.Toinvestigatethis,youwouldneedtoputtogethera

marketbasketfortheelderly,whichwouldhaveahigherweightonhealthcare.

Youwouldthencomparetheriseinthecostofthe"elderlyHbasketwiththatof

thegeneralbasketforCPI.

8.Manyanswersarepossible.Acommonanswermaybethatasstudents,theyspenda

greaterproportionoftheirincomeontuitionandbooksthanthetypicalhousehold.If

thepricesoftuitionandbookshaverisenfasterthanaverageprices,studentsfaceahigher

inflationratethanthetypicalhousehold.

9.Whenbracketcreepoccurred,inflationincreasedpeople'snominalincomes,pushing

themintohighertaxbrackets,sotheyhadtopayahigherproportionoftheirincomesin

taxes,eventhoughtheywerenotgettinghigherrealincomes.Asaresult,realtax

revenuerose.

10.Indecidinghowmuchincometosaveforretirement,workersshouldconsiderthereal

interestrate,sincetheycareabouttheirpurchasingpowerinthefuture,notthenumberof

dollarstheywillhave.

11.a.Wheninflationishigherthanwasexpected,therealinterestrateislowerthan

expected.Forexample,supposethemarketequilibriumhasanexpectedreal

interestrateof3percentandpeopleexpectinflationtobe4percent,sothe

nominalinterestrateis7percent.Ifinflationturnsouttobe5percent,thereal

interestrateis7percentminus5percentequals2percent,whichislessthanthe

3percentthatwasexpected.

b.Sincetherealinterestrateislowerthanwasexpected,thelenderlosesandthe

borrowergains.Theborrowerisrepayingtheloanwithdollarsthatareworth

lessthanwasexpected.

c.Homeownersinthe1970swhohadfixed-ratemortgagesfromthe1960s

benefitedfromtheunexpectedinflation,whilethebanksthatmadethemortgage

loanswereharmed.

25章

SOLUTIONSTOTEXTPROBLEMS:

QuickQuizzes

1.TheapproximategrowthrateofrealGDPperpersonintheUnitedStatesis1.81percent

(basedonTable1)from1870to2000.Countriesthathavehadfastergrowthinclude

Japan,Brazil,Mexico,Canada,Germany,China,andArgentina;countriesthathavehad

slowergrowthincludeIndia,Indonesia,UnitedKingdom,Pakistan,andBangladesh.

2.Thefourdeterminantsofacountry'sproductivityare:(1)physicalcapital,whichisthe

stockofequipmentandstructuresthatareusedtoproducegoodsandservices;(2)human

capital,whichistheknowledgeandskillsthatworkersacquirethrougheducation,

training,andexperience;(3)naturalresources,whichareinputsintoproductionthatare

providedbynature,suchasland,rivers,andmineraldeposits;and(4)technological

knowledge,whichissociety'sunderstandingofthebestwaystoproducegoodsand

services.

3.Waysinwhichagovernmentpolicymakercantrytoraisethegrowthinlivingstandards

inasocietyinclude:(1)investingmorecurrentresourcesintheproductionofcapital,

whichhasthedrawbackofreducingtheresourcesusedforproducingcurrent

consumption;(2)encouraginginvestmentfromabroad,whichhasthedrawbackthatsome

ofthebenefitsofinvestmentflowtoforeigners;(3)increasingeducation,whichhasan

opportunitycostinthatstudentsarenotengagedincurrentproduction;(4)protecting

propertyrightsandpromotingpoliticalstability,fbrwhichnodrawbacksareobvious;(5)

pursuingoutward-orientedpoliciestoencouragefreetrade,whichmayhavethedrawback

ofmakingacountrymoredependentonitstradingpartners;(6)reducingtherateof

populationgrowth,whichmayhavethedrawbackofreducingindividualfreedomand

loweringtherateoftechnologicalprogress;and(7)encouragingresearchand

development,which(likeinvestment)mayhavethedrawbackofreducingcurrent

consumption.

QuestionsforReview

1.Thelevelofanation'sGDPmeasuresboththetotalincomeearnedintheeconomyand

thetotalexpenditureontheeconomy'soutputofgoodsandservices.Thelevelofreal

GDPisagoodgaugeofeconomicprosperity,andthegrowthofrealGDPisagoodgauge

ofeconomicprogress.YouwouldratherliveinanationwithahighlevelofGDP,even

thoughithadalowgrowthrate,thaninanationwithalowlevelofGDPandahigh

growthrate,sincethelevelofGDPisameasureofprosperity.

2.Thefourdeterminantsofproductivityare:(1)physicalcapital,whichisthestockof

equipmentandstructuresthatareusedtoproducegoodsandservices;(2)humancapital,

whichconsistsoftheknowledgeandskillsthatworkersacquirethrougheducation,

training,andexperience;(3)naturalresources,whichareinputsintoproductionthatare

providedbynature;and(4)technologicalknowledge,whichissociety'sunderstandingof

thebestwaystoproducegoodsandservices.

3.Acollegedegreeisaformofhumancapital.Theskillslearnedinearningacollege

degreeincreaseaworker'sproductivity.

4.Highersavingmeansfewerresourcesaredevotedtoconsumptionandmoretoproducing

capitalgoods.Theriseinthecapitalstockleadstorisingproductivityandmorerapid

growthinGDPforawhile.Inthelongrun,thehighersavingrateleadstoahigher

standardofliving.Apolicymakermightbedeterredfromtryingtoraisetherateof

savingbecausedoingsorequiresthatpeoplereducetheirconsumptiontodayanditcan

takealongtimetogettoahigherstandardofliving.

5.Ahigherrateofsavingleadstoahighergrowthratetemporarily,notpermanently.In

theshortrun,increasedsavingleadstoalargercapitalstockandfastergrowth.Butas

growthcontinues,diminishingreturnstocapitalmeangrowthslowsdownandeventually

settlesdowntoitsinitialrate,thoughthismaytakeseveraldecades.

6.Removingatraderestriction,suchasatariff,wouldleadtomorerapideconomicgrowth

becausetheremovalofthetraderestrictionactslikeanimprovementintechnology.

Freetradeallowsallcountriestoconsumemoregoodsandservices.

7.Thehighertherateofpopulationgrowth,theloweristhelevelofGDPperperson,

becausethere'slesscapitalperperson,hencelowerproductivity.

8.TheU.S.governmenttriestoencourageadvancesintechnologicalknowledgeby

providingresearchgrantsthroughtheNationalScienceFoundationandtheNational

InstituteofHealth,withtaxbreaksforfirmsengaginginresearchanddevelopment,and

throughthepatentsystem.

ProblemsandApplications

1.Thefactsthatcountriesimportmanygoodsandservicesyetmustproducealarge

quantityofgoodsandservicesthemselvestoenjoyahighstandardoflivingare

reconciledbynotingthattherearesubstantialgainsfromtrade.Inordertobeableto

affordtopurchasegoodsfromothercountries,aneconomymustgenerateincome.By

producingmanygoodsandservices,thentradingthemfbrgoodsandservicesproducedin

othercountries,anationmaximizesitsstandardofliving.

2.a.Producingcarsrequiresafactorywithmachines,robots,andanassemblyline,as

wellashumancapitalthatcomesfromtrainingworkers.

b.Producingahigh-schooleducationrequiresbooksandbuildingsaswellas

humancapitalfromtheteachers.

c.Producingplanetravelrequiresplanesandairportsaswellashumancapitalin

termsofpilots*knowledge.

d.Producingfruitsandvegetablesrequiresirrigationsystems,harvestingmachinery,

andtruckstotransportthegoodstothemarket,aswellashumancapitalinthe

formofagriculturalknowledge.

3.Today'sstandardoflivingdiffersfromthoseofourgreat-grandparentsbecauseof

improvedtransportation,communications,entertainment,machineryforhouseholdwork,

andcomputers,amongotherthings.

4.Inthemanufacturingsector,employmenthasfallensharplywhileoutputremainsabout

thesamepercentageofGDPasbefore.Thisisgoodforoureconomybecauseitisthe

resultofincreasedproductivity.Manymanufacturedgoodsaremuchcheaperthanthey

usedtobe.

5.a.Moreinvestmentwouldleadtofastereconomicgrowthintheshortrun.

b.Thechangewouldbenefitmanypeopleinsocietywhowouldhavehigher

incomesastheresultoffastereconomicgrowth.However,theremightbea

transitionperiodinwhichworkersandownersinconsumption-goodindustries

wouldget