宏观经济学英文版复习提纲.doc

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1、Four short words sum up what has lifted most successful individuals above the crowd: a little bit more.-author-date宏观经济学英文版复习提纲宏观经济学复习大纲1、Definition of Terms (54, 20 points)Chapter 11.MacroeconomicsMacroeconomics is the study of the economy as a whole, including growth in incomes, changes in prices,

2、 and the rate of unemployment. Chapter 22.Gross domestic product (GDP)Gross domestic product (GDP) measures the income of everyone in the economy and, equivalently, the total expenditure on the economys output of goods and services.3.Value added The value added of a firm equals the value of the firm

3、s output less the value of the intermediate goods that the firm purchases.4.Real GDPReal GDP is the value of goods and services measured using a constant set of prices. 5.GDP deflatorThe GDP deflator is the ratio of nominal GDP to real GDP. It reflects whats happening to the overall level of prices

4、in the economy.6.Consumer price index (CPI)The consumer price index (CPI) measures the price of a fixed basket of goods and services purchased by a typical consumer. It measures the overall level of prices.7.Unemployment rateThe unemployment rate shows what fraction of those who would like to work d

5、o not have a job. Unemployment Rate = Number of Unemployed/Labor Force100.8.Labor-force participation rateThe labor-force participation rate shows the fraction of adults who are working or want to work. Labor-Force Participation Rate = Labor Force / Adult Population 100.Chapter 39.Disposable incomeW

6、e define income after the payment of all taxes, Y T, to be disposable income.10.Marginal propensity to consume(MPC)The marginal propensity to consume (MPC) is the amount by which consumption changes when disposable income increases by one dollar. The MPC is between zero and one.11.Real interest rate

7、The real interest rate is the nominal interest rate corrected for the effects of inflation.Chapter 412.InflationThe overall increase in prices is called inflation,13.HyperinflationHyperinflation is often defined as inflation that exceeds 50 percent per month, which is just over 1 percent per day.14.

8、MoneyMoney is the stock of assets that can be readily used to make transactions.15.Fiat moneyMoney that has no intrinsic value is called fiat money because it is established as money by government decree, or fiat.16.Commodity moneyMost societies in the past have used a commodity with some intrinsic

9、value for money.This type of money is called commodity money.17.Money supplyThe quantity of money available in an economy is called the money supply.18.Quantity equationThe link between transactions and money is expressed in the following equation, called the quantity equation: Money Velocity = Pric

10、e Transactions M V = P T.19.Income velocity of moneyThe income velocity of money tells us the number of times a dollar bill enters someones income in a given period of time.20.Real money balancesM/P is called real money balances. Real money balances measure the purchasing power of the stock of money

11、21.SeigniorageThe revenue raised by the printing of money is called seigniorage.22.Fisher equation and Fisher effectThe nominal interest rate is the sum of the real interest rate and the inflation rate: i = r +. The equation written in this way is called the Fisher equationAccording to the quantity

12、theory, an increase in the rate of money growth of 1 percent causes a 1 percent increase in the rate of inflation. According to the Fisher equation, a 1 percent increase in the rate of inflation in turn causes a 1 percent increase in the nominal interest rate. The one-for-one relation between the in

13、flation rate and the nominal interest rate is called the Fisher effect.23.Shoeleather costsThe inconvenience of reducing money holding is called the shoeleather cost of inflation, because walking to the bank more often causes ones shoes to wear out more quickly24.Menu costsHigh inflation induces fir

14、ms to change their posted prices more often. These costs are called menu costs.25.Classical dichotomyClassical theory allows us to study how real variables are determined without any reference to the money supply. This theoretical separation of real and nominal variables is called the classical dich

15、otomy.26.Monetary neutralityIn classical economic theory, changes in the money supply dont influence real variables. This irrelevance of money for real variables is called monetary neutrality.Chapter 627.Natural rate of unemploymentNatural rate of unemployment is the average rate of unemployment aro

16、und which the economy fluctuates.28.Frictional unemploymentThe unemployment caused by the time it takes workers to search for a job is called frictional unemployment.29.Wage rigidityWage rigidity is the failure of wages to adjust to a level at which labor supply equals labor demand.30.Structural une

17、mploymentThe unemployment resulting from wage rigidity and job rationing is called structural unemployment.31.Efficiency wagesEfficiency-wage theories propose a third cause of wage rigidity in addition to minimum-wage laws and unionization. These theories hold that high wages make workers more produ

18、ctive.Chapter 732.Steady stateAt k*, k = 0,so the capital stock k and output f(k) are steady over time (rather than growing or shrinking). We therefore call k* the steady-state level of capital. The steady state represents the long-run equilibrium of the economy.33.Golden Rule level of capitalThe st

19、eady-state value of k that maximizes consumption is called the Golden Rule level of capital and is denoted k*gold.Chapter 834.Endogenous growth theoryModern theories of endogenous growth attempt to explain the rate of technological progress, which the Solow model takes as exogenous. Chapter 935.Okun

20、s lawBecause employed workers help to produce goods and services and unemployed workers do not, increases in the unemployment rate should be associated with decreases in real GDP. This negative relationship between unemployment and GDP is called Okuns law, Okuns law says that 1 percentage point of u

21、nemployment translates into 2 percentage points of GDP.36.Aggregate demandAggregate demand (AD) is the relationship between the quantity of output demanded and the aggregate price level. In other words, the aggregate demand curve tells us the quantity of goods and services people want to buy at any

22、given level of prices.37.Aggregate supplyAggregate supply (AS) is the relationship between the quantity of goods and services supplied and the price level.38.Demand shocksA shock that shifts the aggregate demand curve is called a demand shock.39.Supply shocksA shock that shifts the aggregate supply

23、curve is called a supply shock.40.Stabilization policyEconomists use the term stabilization policy to refer to policy actions aimed at reducing the severity of short-run economic fluctuations.Chapter 1041.IS curveIS stands for “investment and “saving, and the IS curve represents the negative relatio

24、nship between the interest rate and the level of income that arises from equilibrium in the market for goods and services.42.LM curveLM stands for “liquidity and “money, and the LM curve represents the positive relationship between the interest rate and the level of income that arises from equilibri

25、um in the market for real money balances.43.Keynesian crossThe Keynesian cross is a basic model of income determination. It takes fiscal policy and planned investment as exogenous and then shows that there is one level of national income at which actual expenditure equals planned expenditure.Chapter

26、 1344.Phillips curveThe Phillips curve in its modern form states that the inflation rate depends on three forces: Expected inflation The deviation of unemployment from the natural rate, called cyclical unemployment Supply shocks.These three forces are expressed in the following equation: = E (u un)

27、+vInflation= Expected Inflation (Cyclical Unemployment ) + Supply Shock,whereis a parameter measuring the response of inflation to cyclical unemployment.There is a minus sign before the cyclical unemployment term: other things equal, higher unemployment is associated with lower inflation45.Adaptive

28、expectationsA simple and often plausible assumption is that people form their expectations of inflation based on recently observed inflation. This assumption is called adaptive expectations.46.Demand-pull inflationThe second term, (u un), shows that cyclical unemploymentthe deviation of unemployment

29、 from its natural rateexerts upward or downward pressure on inflation. Low unemployment pulls the inflation rate up. This is called demand-pull inflation because high aggregate demand is responsible for this type of inflation.47.Cost-push inflationThe third term, v, shows that inflation also rises a

30、nd falls because of supply shocks. An adverse supply shock, such as the rise in world oil prices in the 1970s, implies a positive value of v and causes inflation to rise. This is called cost-push inflation because adverse supply shocks are typically events that push up the costs of production.48.Sac

31、rifice ratioThe sacrifice ratio is the percentage of a years real GDP that must be forgone to reduce inflation by 1 percentage point. Although estimates of the sacrifice ratio vary substantially, a typical estimate is about 5: for every percentage point that inflation is to fall, 5 percent of one ye

32、ars GDP must be sacrificed.49.Rational expectationsAn alternative approach is to assume that people have rational expectations. That is, we might assume that people optimally use all the available information, including information about current government policies, to forecast the future.50.Natural

33、-rate hypothesisThe natural-rate hypothesis is summarized in the following statement: Fluctuations in aggregate demand affect output and employment only in the short run. In the long run, the economy returns to the levels of output, employment, and unemploymentdescribed by the classical mode51.Hyste

34、resisSome economists have pointed out a number of mechanisms through which recessionsmight leave permanent scars on the economy by altering the natural rate of unemployment. Hysteresis is the term used to describe the long-lasting influence of history on the natural rate.2、Gap Filling(201, 20 points

35、)Summary in all chapters that we already studied NOTE: I will give you a word list, you choose the word from the list and fill outChapter 11. Macroeconomics is the study of the economy as a whole, including growth in incomes, changes in prices, and the rate of unemployment. Macroeconomists attempt b

36、oth to explain economic events and to devise policies to improve economic performance.2. To understand the economy, economists use modelstheories that simplify reality in order to reveal how exogenous variables influence endogenous variables. The art in the science of economics is in judging whether

37、 a model captures the important economic relationships for the matter at hand. Because no single model can answer all questions, macroeconomistsuse different models to look at different issues.3. A key feature of a macroeconomic model is whether it assumes that prices are flexible or sticky. Accordi

38、ng to most macroeconomists, models with flexible prices describe the economy in the long run, whereas models with sticky prices offer a better description of the economy in the short run.4. Microeconomics is the study of how firms and individuals make decisions and how these decisionmakers interact.

39、 Because macroeconomic events arise from many microeconomic interactions, all macroeconomic models must be consistent with microeconomic foundations, even if those foundations are only implicit.Chapter 21. Gross domestic product (GDP) measures the income of everyone in the economy and, equivalently,

40、 the total expenditure on the economys output of goods and services.2. Nominal GDP values goods and services at current prices. Real GDP values goods and services at constant prices. Real GDP rises only when the amount of goods and services has increased, whereas nominal GDP can rise either because

41、output has increased or because prices have increased.3. GDP is the sum of four categories of expenditure: consumption, investment, government purchases, and net exports.4. The consumer price index (CPI) measures the price of a fixed basket of goods and services purchased by a typical consumer. Like

42、 the GDP deflator, which is the ratio of nominal GDP to real GDP, the CPI measures the overall level of prices.5. The labor-force participation rate shows the fraction of adults who are working or want to work. The unemployment rate shows what fraction of those who would like to work do not have a j

43、ob.Chapter 31. The factors of production and the production technology determine the economys output of goods and services. An increase in one of the factors of production or a technological advance raises output.2. Competitive, profit-maximizing firms hire labor until the marginal product of labor

44、equals the real wage. Similarly, these firms rent capital until the marginal product of capital equals the real rental price. Therefore, each factor of production is paid its marginal product. If the production function has constant returns to scale, then according to Eulers theorem, all output is u

45、sed to compensate the inputs.3. The economys output is used for consumption, investment, and government purchases. Consumption depends positively on disposable income. Investment depends negatively on the real interest rate. Government purchases and taxes are the exogenous variables of fiscal policy

46、.4. The real interest rate adjusts to equilibrate the supply and demand for the economys outputor, equivalently, the supply of loanable funds (saving) and the demand for loanable funds (investment). A decrease in national saving, perhaps because of an increase in government purchases or a decrease i

47、n taxes, reduces the equilibrium amount of investment and raises the interest rate. An increase in investment demand, perhaps because of a technological innovation or a tax incentive for investment, also raises the interest rate. An increase in investment demand increases the quantity of investment

48、only if higher interest rates stimulate additional saving.Chapter 41. Money is the stock of assets used for transactions. It serves as a store of value, a unit of account, and a medium of exchange. Different sorts of assets are used as money: commodity money systems use an asset with intrinsic value, whereas fiat money systems use an asset whose sole function is to serve as money. In modern economies, a central bank such as the Fede