Macroeconomics Exam 1 – Complete Questions & Answers (100% Correct)

Macroeconomics Exam 1 – Complete Questions & Answers (100% Correct) US annual population growth rate: -ANSWER - n=1% per year in US in the last century US optimal target inflation rate: -ANSWER - p*=1% per year The ranking of the quality of this macroeconomics course: -ANSWER - Ranking=#1 (where #1 is the best of the best) US long-run average annual growth rate in RGDP per capita: -ANSWER - gpc*=g*-p*=3%-1%=2% US long-run average annual real interest rate on low-risk loans: -ANSWER - r*=gpc*=2% US long-run average annual growth rate in labor productivity over the last 100 years: -ANSWER - gpc*=2% U.S. long-run average annual growth rate in RGDP: -ANSWER - g* = 3% per year since 1947 for U.S. US long-run average annual growth rate in the nominal wage (which is the growth rate in nominal income per capita): -ANSWER - w*=gpc*+p*=2%+1%=3% US long-run average annual nominal interest rate on low-risk loans: -ANSWER - i*=r*+p*=2%+1%=3% US long-run average annual growth rate in NGDP: -ANSWER - nomg*=g*+p*=3%+1%=4% US natural unemployment rate, or NAIRU: -ANSWER - u*=5% Average number of years for a full business cycle in the US: -ANSWER - t=6 years Adam Smith: June 5, 1723-July 17, 1790 -ANSWER - Laissez faire: hands off policy for governments John Maynard Keynes: June 5, 1883-April 21, 1946 -ANSWER - Sticky (or rigid) wages Active government stabilization policy, especially in recessions Thomas Robert Malthus: February 14, 1766-December 29, 1834 -ANSWER - Dire predictions regarding human population explosion Irving Fisher: February 27, 1867-April 29, 1947 -ANSWER - Fisher equation Milton Friedman: July 31, 1912-November 16, 2006 -ANSWER - Monetarist, Chicago School of Economics "Inflation is always and everywhere a monetary phenomenon." Paul Krugman: February 28, 1953-Present