Solutions - Macroeconomia - Blanchard - 3 Ed.

Blanchard – Macroeconomia – 3ª edição

ANSWERS TO END-OF-CHAPTER PROBLEMS CHAPTER 1 Quick Check 1.

a.  b. c.

d. e. ,. .

True. True. True/Uncertain. Average growth i lower ince 1!"3. #owever$ ince the mid%1!!&$ out'ut 'er wor(er ha growth growth at about the 're%1!"3 rate. )t* too oon to tell whether whether thi mar( a return to 're%1!"3 growth rate or im'l+ a ,ew luc(+ +ear. True. -ale. -ale.

a. a. U0 U 4a'an

3.

1!&%&&&

&&1%&&

3.2 3.12 .2

&.!2 1.2 %&.!2

 b.

5robabl+ cloer to long%run average$ becaue average over hort time 'eriod re,lect  buine c+cle. #owever$ 4a'an wa growing e6ce'tionall+ ,at in the earl+ 'otwar  'eriod a it caught u' to the United 0tate. ven i, 4a'an recover ,rom it current lum' over the ne6t decade$ it ma+ not reume growth a high a it 'reviou average.

a.

7ow 7ow unem unem'l 'lo+ o+me ment nt migh mightt lead lead to an incr increa eae e in in,l in,lat atio ion. n.

 b.

Although meaurement error ma+ contribute to the meaured lowdown in growth$ there are other relevant iue$ including the 'roductivit+ o, new reearch and the accumulation o, new ca'ital.

c.

Although labor mar(et rigiditie ma+ be im'ortant$ it i alo im'ortant to conider that thee rigiditie ma+ not be e6ceive$ and that high unem'lo+ment ma+ arie ,rom ,lawed macroeconomic 'olicie.

d.

Alth Althou ough gh 'oo 'oorr regul regulat atio ion n o, the the ,inan ,inanci cial al +t +tem em ma+ ma+ be cont contri ribu buti ting ng to to the the lengt length h o, 4a'an* 4a'an* lum' lum'$$ mo mott econom economit it believ believee that that the the colla' colla'e e in 4a'ane 4a'anee e aet aet 'rice 'rice triggered the economic economic downturn. Moreover$ tightening tightening regulation would li(el+ involve more 'ain in the hort run ince ome ban( and ,irm would be ,orced to cloe.

e.

Alth Althou ough gh the the ur uro o will will rem remov ovee obt obtac acle le to ,re ,reee trad tradee betw betwee een n uro uro'e 'ean an cou count ntri rie e$$ each each countr+ will be ,orced to give u' it own monetar+ 'olic+.

Dig Deeper  8.

9icuion :uetion.

.

a.

1& +ear; 1.1& or 1& 2 higher? & +ear; 2 higher? & +ear; 82 higher 

 b.

!2? "2? 12 higher  higher 

5earon ducation do Brail

1

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Blanchard – Macroeconomia – 3ª edição

.

c.

Ta(e out'ut 'er wor(er a a meaure o, the tandard o, living. 1& +ear; 1.!/1.1>1.1"$ o the tandard o, living would would be about 1"2 higher? & +ear; 3"2 higher? & +ear; 1&2 higher 

d.

@o. 7abor 'roductivit+ growth ,luctuate a lot ,rom +ear to +ear. The lat ,ew +ear ma+ re'reent re'reent good good luc(. )t i too oon to tell whether whether there ha been a change change in the trend oberved ince 1!"3.

!.!1.1 lnI"&&$&&&. D95; I3&&$&&&HI"&&$&&&>I1$&&&$&&&. I3&&$&&&HI"&&$&&&>I1$&&&$&&&.

c.

Fage; I I&&$&& $&&& H I I&$&&&>I8&$&&&. 5ro,it; I1$&&&$&&&.

a.

&&1 D95; 1&JI$&&&H8JI1$&&&H1&&&JI1>I$&&& && D95; 1JI3$&&&HJI&&H1&&&JI1>I8& 1JI3$&&&HJI&&H1&&&JI1>I8&$&&& $&&&  @ominal D95 ha increaed b+ &2.

 b.

&&1 real I31$&&& 1$&&& Keal .3>32

.

c.

Analogou to 8d.

a.

&&1 &&1 real real D95 D95 > 1&JI 1&JI$ $& && & H 8JI" 8JI"& & H 1&&& 1&&&JI JI1 1 > I!$ I!$&& &&& & && real D95 > 1JI$&& H JI"& H 1&&&JI1 > I3$&&

 b.

.82

c.

9e,lator in & &&1>I$&& $&&&/I!$&& $&&&>. . 9e,lator in &&>I8&$&&&/I3$&&>1.13 &&>I8&$&&&/I3$&&>1.13 )n,lation > .318 > 31.82.

d.

Le$ e$ e ee a' a''en 'endi6 ,or ,or ,ur ,urth ther er dicu icuio ion.

Dig Deeper  ".

.

!.

a.

The :ual :ualit it+ + o, a rou routin tine chec chec(u (u' ' im' im'rove rove over over tim time. Ehec Ehec(u (u' ' now ma+ incl inclu ude D D$ ,or e6am'le. Medical ervice are 'articularl+ 'articularl+ a,,ected b+ thi 'roblem due due to contant im'rovement in medical technolog+. technolog+.

 b.

Lou need to (now how the mar(et value 'regnanc+ chec(u' with and without ultra% ound in that +ear.

c.

Thi Thi in,or in,ormat mation ion i not not avai availab lable le inc incee all all docto doctor r ado' ado'ted ted the the new new tech techno nolog log+ + imultaneoul+. 0till$ +ou can tell that the :ualit+%adCuted increae will be lower than &2.

a.

Meaured Meaured D95 increae increae b+ I1&HI1>I I1&HI1>I. . EH)HD>1&H&.JEH)HD>1&H&.J!&&. >!&&. Again$ total demand e:ual 'roduction. 'roduction.

c.

5riv 5rivat atee av avin ing> g>L% L%E% E%T> T>!& !&&% &%1 1&% &%&. &.J J1 1&. &. 5ubl 5ublic ic avi aving ng >T%D >T%D>% >%1& 1&.. @ati @ation onal al aving aving I b>I3$ 3$&& &&& & b.

".

The ratio o, currenc+ to total mone+ 1&& L>1&&?? i>1& i>1&2? 2? E>8&? E>8&? )>3&. )>3&. A ,ical ,ical e6'an e6'anio ion n increa increae e out'ut out'ut and the the int intere eret t rate. rate. The increae in out'ut increae conum'tion.

Dig Deeper  .

-irm -irm decid decidin ing g how how to ue ue thei theirr own ,un ,und d wil willl com'a com'are re the the retur return n on bond bond to the the retur return n on invetment. Fhen the interet interet rate on bond increae$ increae$ the+ become become more attractive$ and ,irm are more li(el+ to ue their ,und to 'urchae bond$ rather than to ,inance invetment 'roCect.

.

a.

5eo' 5eo'le le woul would d hold hold onl+ onl+ mone+ one+$$ and and not not bond bond$ $ when when the the inte intere ret t rate rate wa wa nega negati tive ve.. Mone+ would be a better tore o, value than bond.

 b.

0ee hint.

c.

0ee hint.

d.

7ittle 7ittle e,,ect. e,,ect. ), the interet interet rate i actuall+ actuall+ Rero$ than the increae increae in M ha literall+ literall+ no e,,ect.

e.

@o. ), there i no e,,ect on the interet rate$ which a,,ect invetment$ monetar+ 'olic+ cannot a,,ect out'ut.

a.

-all in T hi,t 7M right. )ncreae in M hi,t 7M u'. Nut'ut increae.

 b.

Elinton%Dreen'an 1/1/1.&>.!

 b.

Fage etting; u>1%F/5>2

c.

F/5> F/5>1/ 1/1. 1.1> 1>.! .!1? 1? u>1% u>1%.! .!1> 1>!2 !2.. The The incr increa eae e in the the mar( mar(u' u' lowe lower r the the real real wage wage.. -rom -rom the wage%etting e:uation$ the unem'lo+ment unem'lo+ment rate mut rie rie ,or the real wage to ,all. ,all. 0o the natural rate increae.

Dig Deeper 8.

a.

Anwer will var+.

 b%c.

Mot li(el+$ the Cob +ou +ou will have ten +ear later will 'a+ a lot more more than +our reervation wage at the time 2

 b.

Vt >&.1%J.&3 > 82 ever+ +ear beginning with +ear t.

c.

Vet> & and V t>82 ,orever. )n,lation e6'ectation e6'ectation will will be ,orever ,orever wrong. Thi i unli(el+.

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Blanchard – Macroeconomia – 3ª edição

.

d.

A ind inde6 e6at atio ion n incr increa eae e$ $ low low une unem' m'lo lo+m +men entt lead lead to to a larg larger er inc incre rea aee in in, in,la lati tion on ove overr time.

a.

Le. The averag rage rat rate o, unem'lo+ment ent wa lower in the 1!!&. )ndeed$ even though the unem'lo+ment rate wa at a hitorical low$ in,lation roe ver+ little.

 b.

The natural rate o, unem'lo+ment unem'lo+ment 'robabl+ decreaed. decreaed.

Explre Fur!her  ".

a%c.

The e:uation that eem to ,it well i V t – Vt%1 >  –  t$ which im'lie a natural rate o,  a''ro6imatel+ 2.

.

The The rel relat atio ion nhi hi' ' im'l im'l+ + a lowe lowerr natu natura rall rat ratee in in the the mo more re rec recen entt 'er 'erio iod. d.

CHAPTER ) Quick Check 1.

a.  b. c. d. e. ,. g. h.

-ale. True. True. -ale. -ale. True. True. True.

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Blanchard – Macroeconomia – 3ª edição

8.

.

a.

0ee 0ee te6t te6t ,or ,or ,ull ,ull anw anwer er.. Drad Dradua uali lim m redu reduce ce need need ,or ,or larg largee 'oli 'olic+ c+ win wing g$$ with with e,,e e,,ect ct that are di,,icult to 'redict$ but immediate reduction ma+ be more credible and encourage ra'id$ ,avorable change in in in,lation e6'ectation. e6'ectation. Nn the other hand$ the taggering taggering o, wage deciion ugget that$ i, the 'olic+ i credible$ a gradual diin,lation i the o'tion conitent with no change in the unem'lo+ment rate.

 b.

@ot clear. Baed in Ball* evidence$ evidence$ 'robabl+ ,at diin,lation$ diin,lation$ de'ending on the ,eature lited in 'art 1

 b.

Vt > 1&2? VtH1 > 2? VtH > 2? VtH3 > 82? VtH8 > 2

c.

 +ear +ear? ? acr acri, i,ic icee ratio ratio>< > ."2? V tH > 3.!&2? VtH3 > .83&2? V tH8 > 1.32 7e than  re:uired.

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Blanchard – Macroeconomia – 3ª edição

tH!; tH1&;

1.2 1.2

8.32 8.!2

c.

)n,lation )n,lation doe not decline decline moo moothl+ thl+.. )n the earl+ +ear$ +ear$ the large unem'lo+ unem'lo+ment ment rate 3 2 > normal out'ut growth in thi e6am'le$ negative in,lation drive real mone+ growth 2 and V>&2 in the medium run.

CHAPTER 1* Quick Check 1.

a.  b. c. d. e. ,. g. h.

True. True. -ale. -ale. -ale. -ale. True. Uncertain.

.

a.

6am'le; -rance; I8&.! (.

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Blanchard – Macroeconomia – 3ª edição

e.

/@> /@>8 8 im'l im'lie ie L/@> L/@>. . /@> /@>  im'l im'lie ie L/@> L/@>. .3 3.. Nut' Nut'ut ut le le than than doub double le. .

,.

@o.

g.

@o. @o. )n 'art 'art