264 Answered Questions for the topic macroeconomics

Macroeconomics

07/10/19

What institutions are examples of "shadow banking"?

I often hear the term shadow banking tossed around when discussing the United States and Chinese economies. What exactly is shadow banking and could you give examples of some specific companies... more
Macroeconomics

07/10/19

How does a reduction in consumer spending in favour of consumer saving, affect economic activity?

Let's say our government runs an advertising campaign, encouraging its citizens to reduce spending money on consumer items, and instead save more money. Let's say the campaign is successful, and... more
Macroeconomics

07/07/19

When countries industrialise, why do jobs from agriculture shift to manufacturing?

This is a historical trend whether it may 18th century Britain or 19th century America or what's currently happening in China. What I am confused is by the fact that manufacturing jobs such as... more
Macroeconomics

07/06/19

What keeps minimum wage rates in balance?

I would posit that the minimum wage is determined more on a political than an economic basis. The fact is that there are more wage earners than business owners and, generally speaking, the wage... more
Macroeconomics

07/04/19

Has the natural rate of unemployment decreased with modern travel and the Internet?

The natural rate of unemployment is a combination of structural unemployment and frictional unemployment. Structural unemployment is caused by a surplus of labor at a given wage in a given area. ... more
Macroeconomics

07/03/19

Do countries invest in the country's own stock market?

For example can the government of the UK invest in some company with shares in the FTSE 100? Or can Russia take the opportunity now that the shares of oil companies are low to buy them?
Macroeconomics

06/29/19

Does the money's "Store of value" function actually exists?

I'm aware of the following four functions of money:1. Medium of exchange.2. Measure of value (in dollars, pounds, etc.)3. Standard for exchanging goods (guaranteed by the Fed)4. A Store of value... more
Macroeconomics

06/27/19

Does RBC models pin down equilibrium output, amount of labor and capital without initial condition?

In ordinary equilibrium models, we can pin down equilibrium quantity by supply-demand functions.Is this the same in RBC models? Can we pin down equilibrium output and amount of labor and capital... more
Macroeconomics

06/26/19

How do I find the number of employed workers and unemployed workers?

Ellen is downloading labor market data for the most recent month, but her connection is slow. So far this is all she has been able to collect:  Unemployment Rate      5.8% Participation... more
Macroeconomics

06/24/19

Right definition of natural rate of unemployment?

Earlier I studied macroeconomics from Blanchard. But now while reading Mankiw's Macroeconomics I found different definition for natural rate of unemployment. According to Blanchard,**"the rate of... more
Macroeconomics

06/24/19

How does the money supply behave when bank loans are repaid?

In a fractional reserve system when banks lend out money, that money is created out of thin air by a accounting journal entry, and the money supply goes up by the amount of the loan & when the... more
Macroeconomics Economics

06/22/19

Explain why Jamaica's opportunity cost of one cooler is 0.5 radios and Norways opportunity cost on one cooler is 0.125 radios?

Assume that Jamaica and Norway can switch between producing coolers and producing radios at a constant rate. The following table shows the number of coolers or number of radios each country can... more
Macroeconomics

06/20/19

Is 'full employment' synonymous with 'the natural rate of unemployment'?

Macroeconomics

06/20/19

What benefits does Bitcoin (i.e. cryptocurrency) offer?

I really, really like moderate inflation. I live in Sweden where the interest rates just went negative because we are on the brink of deflation, and the rate of inflation we have now is far too... more
Macroeconomics

06/19/19

Are real wages a good measure of economic progress?

Why do we tend to use Real GDP Per Capita instead of the real wage? What is the issue of using the real wage instead?
Macroeconomics

06/18/19

Is a country in economic downturn if its growth rate is negative, but improving?

Macroeconomics

06/17/19

Road to equilibrium in a basic economic model?

I am reading a (macro)economics book which introduces a model of a small, closed economy. Two relations are presented. The IS relation (savings equals investments, or demand equals production) and... more
Macroeconomics

06/17/19

What benefits do OPEC countries obtain by cutting oil supply?

It is unclear to a economic novice like me why OPEC is not cutting down production and raising oil prices. I have read several journalists commenting upon this on the internet but perhaps an... more
Macroeconomics

06/17/19

Does GDP count both the investment and the house rental?

Suppose you bought a new house in the year of 2010. Then the price of the house in counted toward the 2010 GDP. Say then you live in the new house in the following years. So in these years, the GDP... more
Macroeconomics

06/17/19

Is zero inflation desirable?

Is zero inflation really desirable?To be more precise: Does inflation in real life have benefits that in some situations outweigh its social cost? E.g.: it works as a disincentive against holding... more
Macroeconomics

06/16/19

Are savings necessary for economic growth?

So, I've had this confusion for a long time. We all know how spending is absolutely vital for economic growth. However, at the same time, are savings necessary too?My initial opinion was "no". In a... more
Macroeconomics

06/13/19

In other words, what is the value of the final goods the nation produced including trees, lumber and bookshelves?

Last year, a small nation with abundant forests cut down $200 worth of trees. It then turned $100 worth of trees into $150 worth of lumber. It used $100 worth of that lumber to produce... more
Macroeconomics

06/10/19

How does a cash deposit change the M1 measure of the money supply?

The question asks what is the immediate effect of the cash deposit on the M1 measure of money supply. The official answer is "There is no change in the M1 measure of the money supply. (Demand... more
Macroeconomics

06/01/19

Benefits of a weak national currency?

I often hear that developing economies can benefit from a weak national currency. For example China as exporter deliberately makes its national currency weaker, so that it gains an advantage. Are... more
Macroeconomics

06/01/19

Doubt on a simple problem from Mankiw's Macroeconomics?

I've just started studying Macroeconomics and I have a quick doubt about the following problem from Mankiw's Macroeconomics 7th edition, page 81:> 8. Consider how each of the following events is... more

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