代做Exercise Macroeconomics Theory (751702)代写数据结构语言

Exercise Macroeconomics Theory (751702)

1 .Suppose that people’ s expectations of inflation are subject to random shocks. This is, instead of being merely adaptive, expectation inflation in period t, as seen in period t-1, is  where   is random shock. This shock is normally zero, but it deviates from zero when some event beyond past inflation causes expected inflation to change. Similarly, .

1.1 Derive both the dynamic aggregate demand (DAD) equation and the dynamic aggregate supply (DAS) equation in this slightly more general model.

1.2 Suppose that the economy experiences an inflation scare. That is, in period t, for some reason people come to believe that inflation in period t+1 is going to be higher, so is greater than zero (for this period only). What happens to the DAD and DAS curves in period t? What happens to output, inflation, and nominal and real interest rates in that period? Explain

1.3 What happens to the DAD and DAS curves in period t+ 1? What happens to output, inflation, and nominal and real interest rates in that period? Explain.

2. Using the DAD-DAS framework, analyze how these policy shocks would affect key macroeconomic variables such as output, inflation, and interest rates over time. Your answer should address the following components:

2 .1 Explain the underlying concepts of the Dynamic Aggregate Demand (DAD) and Dynamic Aggregate Supply (DAS) model. How do these dynamic curves differ from their static counterparts?

2.2 Use the DAD-DAS framework to illustrate the short-run and long-run adjustments in the economy following this monetary policy shock. Explain the dynamic process by which the economy transitions from one equilibrium to another.

2.3 Consider a scenario where both the monetary policy shock (increase in interest rate) and the fiscal policy shock (increase in government spending) occur simultaneously. Analyze how these shocks would interact within the DAD-DAS framework.

3. Consider the Neoclassical growth model with a steady-state level of per capita output. Suppose a society can choose its rate of population growth. How can this choice affect the steady-state per capita output? Could such a policy help the country avoid falling into a poverty trap?

4. Are the following statements true or false with Venezuela crisis with hyperinflation? Explain.

4.1 In the long run, the primary impact of expansionary monetary policy in Venezuela will be on real output and employment rather than the general level of prices.

4.2 Economic fluctuations in Venezuela would be both less common and less severe if monetary policy kept the rate of inflation low and (approximately) constant.

4.3 In case of Venezuela, one people come to expect a given rate of inflation, the inflation will neither stimulate real output nor reduce unemployment.

4.4 DAD and DAS model cannot explain and predict the Venezuela crisis according to monetary policy assumption.

5. Using the Neo-Classical Solow Growth Model, analyze the determinants of economic growth in the context of capital accumulation, labor force growth, and technological progress. Your answer should address the following components:

5.1 Discuss the factors that determine the steady-state level of output per worker. How do changes in the savings rate, population growth rate, and rate of technological progress affect the steady state?

5.2 Analyze the impact of an increase in the savings rate on the economy's transition to a new steady-state. What are the short-term and long-term effects on output per worker, capital per worker, and consumption per worker?

5.3 Discuss the role of technological progress in driving long-term growth. How does the Solow model incorporate technological progress, and what are the implications for economic policy?

6. “Because policy changes exert an impact on the economy only after a period of time and forecasting is an imprecise science, trying to stabilize the economy with macroeconomic policy is likely to do more damage than good.” Would an activist agree with this statement? Would a non-activist?

7. Assume, you are an economic advisor in a country that is experiencing high inflation, which is eroding purchasing power and destabilizing the economy. The government is considering various macroeconomic policy options to combat this inflation, including monetary tightening, fiscal austerity, and supply-side reforms. Your task is to use macroeconomic theory to analyze the causes of inflation, evaluate the potential effectiveness of these policies, and recommend a course of action.

8. Suppose an earthquake destroys one-quarter of capital stock. Discuss the adjustment process of the economy, show what happens to growth in the short run and in the long run.