Macroeconomics
10th Edition
ISBN: 9780134896441
Author: ABEL, Andrew B., BERNANKE, Ben, CROUSHORE, Dean Darrell
Publisher: PEARSON
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Chapter 8, Problem 1AP
To determine
To know: The difference in expansion and contraction between period of World War II and World War I.
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Chief statistician Datuk Seri Dr Mohd Uzir Mahidin said Malaysia is expected to continue recording a slower economic growth in 2Q 2020 due to the Covid-19 pandemic, based on the near-term economic direction portrayed by the Leading Index (LI) for the reference month of February 2020.
Mohd Uzir said GDP growth for 1Q 2020, meanwhile, was dragged by negative growth across all sectors except for services and manufacturing which grew 3.1% and 1.5% respectively.
"Private final consumption expenditure in this quarter was on essential products such as food and non-alcoholic beverage, communication and housing, water, electricity and other fuels," he said in a statement on Malaysia's economic performance in 1Q 2020, today.
He added that the Movement Control Order (MCO), which began on March 18, has resulted in lower household expenditure, which in turn, directly affected the industries related to food and beverage,…
The following table shows Spain’s (annualized) quarterly real GDP growth rates for the 2007–2012 period. (Roman numbers refer to quarters.)
a) Plot real GDP growth rate in a graph, and identify a trend in the data.
b) Based on the data shown, identify the beginning (i.e., the year and the quarter) of the current recession.
10.14 Total economic output in three years. The n - vector xt denotes the economic output of a country in n different sectors, in yeart. An economist models the economic output using a linear dynamical system model xt+1 = Axt, where A is an n \times n matrix. Assuming her model is correct, find an expression for the total economic output in yeart + 3, in terms of xt and A. (The total economic output is the sum of the economic output in the n sectors.)
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- This case study focuses on the Australian economy in 2019, before the COVID-19 pandemic hit. On 4th September 2019, the Australian Bureau of Statistics (ABS) published Real GDP data for the quarter ending June, 2019. (The reporting of GDP always lags by about 2 months as it takes time to collect and compile data). The data showed that the Australian economy recorded a quarterly growth of 0.5%. However, there was a decrease in Real GDP per capita. Furthermore, Real GDP per capita in June 2019 was lower than it was a year before (June 2018). Overall, while Real GDP still increased, the growth was very weak; the weakest on record since March 2001. (Source: Australian Financial Review and The Guardian). Required: Question 1. Clearly explain what Real GDP per capita means.Clearly explain why Real GDP per capita decreased whereas there was still growth in Real GDP for the quarter ending June 2019. Question 2. Given the economic conditions described above, predict how the following key…arrow_forwardThis case study focuses on the Australian economy in 2019, before the COVID-19 pandemic hit. On 4th September 2019, the Australian Bureau of Statistics (ABS) published Real GDP data for the quarter ending June, 2019. (The reporting of GDP always lags by about 2 months as it takes time to collect and compile data). The data showed that the Australian economy recorded a quarterly growth of 0.5%. However, there was a decrease in Real GDP per capita. Furthermore, Real GDP per capita in June 2019 was lower than it was a year before (June 2018). Overall, while Real GDP still increased, the growth was very weak; the weakest on record since March 2001. (Source: Australian Financial Review and The Guardian). Question 4. Given the economic conditions described above, recommend the appropriate monetary policy that the Reserve Bank of Australia (RBA) should implement.Clearly explain why this type of monetary policy is needed. Question 5. Describe in details the steps the RBA must undertake to…arrow_forwardConsider the economic model: Yt = C +i Ct myt-1 act-1 where is GDP, c is consumption, i is investment, m and a are multipliers. (i) Write down a difference equation for y (ii) Find the condition under which the steady state exists, and find the steady state solutionarrow_forward
- This case study focuses on the Australian economy in 2019, before the COVID-19 pandemic hit. On 4th September 2019, the Australian Bureau of Statistics (ABS) published Real GDP data for the quarter ending June 2019. (The reporting of GDP always lags by about 2 months as it takes time to collect and compile data). The data showed that the Australian economy recorded quarterly growth of 0.5%. However, there was a decrease in Real GDP per capita. Furthermore, Real GDP per capita in June 2019 was lower than it was a year before (June 2018). Overall, while Real GDP still increased, the growth was very weak; the weakest on record since March 2001. (Source: Australian Financial Review and The Guardian). Required: Question 1. Clearly explain what Real GDP per capita means.Clearly explain why Real GDP per capita decreased whereas there was still growth in Real GDP for the quarter ending June 2019. Question 2. Given the economic conditions described above, predict how the following key…arrow_forwardThis case study focuses on the Australian economy in 2019, before the COVID-19 pandemic hit. On 4th September 2019, the Australian Bureau of Statistics (ABS) published Real GDP data for the quarter ending June 2019. (The reporting of GDP always lags by about 2 months as it takes time to collect and compile data). The data showed that the Australian economy recorded quarterly growth of 0.5%. However, there was a decrease in Real GDP per capita. Furthermore, Real GDP per capita in June 2019 was lower than it was a year before (June 2018). Overall, while Real GDP still increased, the growth was very weak; the weakest on record since March 2001. (Source: Australian Financial Review and The Guardian). Question: Draw appropriate graph(s) to illustrate the Australian economy in June 2019, considering the previously described economic conditions.arrow_forwardThis case study focuses on the Australian economy in 2019, before the COVID-19 pandemic hit. On 4th September 2019, the Australian Bureau of Statistics (ABS) published Real GDP data for the quarter ending June 2019. (The reporting of GDP always lags by about 2 months as it takes time to collect and compile data). The data showed that the Australian economy recorded quarterly growth of 0.5%. However, there was a decrease in Real GDP per capita. Furthermore, Real GDP per capita in June 2019 was lower than it was a year before (June 2018). Overall, while Real GDP still increased, the growth was very weak; the weakest on record since March 2001. (Source: Australian Financial Review and The Guardian). Questions: Question 4. Given the economic conditions described above, recommend the appropriate monetary policy that the Reserve Bank of Australia (RBA) should implement.Clearly explain why this type of monetary policy is needed. Question 5. Describe in detail the steps the RBA must…arrow_forward
- An economy that can be described by the Rosier model is in steady state. The ratio of outstanding loans to the money stock is 8 to 1. What is the growth rate of the money stock in this economy (in %) if bank saving is always 2% of outstanding loans at the beginning of the period? Answer: 1.60 The correct answer is: 2.29arrow_forwardPart 1 Please analyse the various components of AD for India. Track the GDP growth of India pre and post COVID. Analyse the reasons for any changes in the growth rates. Compare the growth of India with two advance economies and two emerging economies. PART 2 Mention and evaluate the demand management policies that have been taken by the Indian Government. You are encouraged to look into the data published by the central bank and statistical organisations of the country. Also please use the appropriate graphs to support your analysis.arrow_forwardConsider a model of the economy's aggregate output, where output in period t is given by: Y₁ = A+K (h+Lt) ¹-a Where At is TFP in period t, K, is the capital stock, L, is the labor force, and he is the average education of each worker. a) Use the growth accounting framework to find an expression for the growth rate of output. (hint, take the natural log of the expression and then a derivative with respect to time, t). b) Using the data in the table below, and your expression from part (a) above, calculate the growth rate in TFP. Assume that capital's share of income, a, is 1/3. (hint, to calculate the growth rate in a variable, say GDP, calculate the percentage change over the base year: gy = - Yt+1-Yt) Yt t 2021 2022 Y₁ 100.0 105.0 Kt 15.0 15.5 Lt 10.0 10.1 ht 13.30 13.44 c) Based upon your calculations above, what is the share of growth in output that is attributable to growth in TFP? Further, can we conclude that this represents the contribution of innovation to economic growth over…arrow_forward
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