Capital accumulation does not affect the natural output level in the long run. Only
technological progress does. (5%)
One of the reasons that deflation is bad to the economy is it discourages
investment.
To fight the most serious recession since World War II, our government attempts to
boost consumer spending by issuing shopping vouchers worth NT$3,600 per person.
In the first press conference formally announcing this policy, Premier Liu Chao-shiuan
asserted that this stimulus plan will contribute to 0.64% growth of 2009 GDP. Please
answer the following questions about this policy with your knowledge from economic
theories:
(1) Is this a fiscal or monetary policy? Please answer the question and give me a brief
reason to support your answer. (5%)
(2) In the subsequent discussion, some government officials mentioned the “multiplier
effect” of this policy. Please elaborate what this effect is with an economic model.
(Some terms for you to use: GDP: Y, consumption: C, investment: I, government
spending: G, exports: X, imports: M, propensity to consume: c, tax rate: t, interest
rate: r, exchange rate: e. Variables you can use are not limited to the above list.
State clearly the meaning of the other variables you use.) (5%)
(3) While a lot of Asian governments look very closely to the effect of this shopping
voucher policy, economists are quite skeptical about it and some even believe there
will be no effect at all. Please use the model in part (2) to explain which link or
links might not play out exactly as the government expects. (5%)
(4) Late Nobel laureate Milton Friedman brought up “permanent income hypothesis”
to challenge the traditional view on the consumption function. Please explain what
implication of this hypothesis has on the shopping voucher plan and the logic
behind it with an economic model. (5%)
(5) Suppose it is March 2010 now and all the economic data for 2009 are all available
to the public. Please tell me how you will evaluate whether the policy of the
shopping voucher is successful. State carefully what your assumptions are and
obstacles you have. (5%)
Sheila and Bruce each have an endowment of lemons and limes. Sheila has a bundle of
5 lemons and 12 limes and Bruce has a bundle of 5 lemons and 8 limes. They have
identical preferences over bundles of lemons and limes and those preferences can be
represented by the utility functionU(x, y) = xy where x represents the number of
lemons and y represents the number of limes.
(1) Draw that Edgeworth box representing the exchange economy of Sheila and Bruce.
Indicate in your diagram the endowment point. Are their endowments an efficient
allocation for this economy? If not why not? Illustrate a sample pair of indifference
curves through the endowment point in your Edgeworth box diagram. (5%)
(2) If Sheila and Bruce were to trade then what would be the pattern of trade? Find
one trade that will make both Sheila and Bruce strictly better off. Illustrate the
allocation of the results from this trade in your diagram. (5%)
(3) Find the contract curve for this economy. Is the endowment point on the contract
curve? In a new Edgeworth box diagram illustrate the contract curve. (5%)
(4) An alternative criterion for selecting allocations in an economy is the utilitarian
criterion. The utilitarian criterion chooses the allocations that give the highest sum
of individual utilities. Would the allocations selected by the utilitarian criterion be
Pareto efficient (in other words if an allocation generates the greatest sum of
utilities would that allocation be efficient)? Give a brief explanation. (5%)
(5) Given the contract curve that you found in part (3) find the allocations that satisfy
the utilitarian criterion. Would any of these allocations be the possible result of free
trade between Sheila and Bruce given their initial endowments? Give a brief
explanation.
(6) Calculate each individual’s offer curve. (5%)
可觀看題目詳解,並提供模擬測驗!(免費會員無法觀看研究所試題解答)