Chat with AIExam 1: Introduction
Both the trade and budget balance were in roughly zero until the 1980s when the budget deficit increased dramatically and the U.S.trade deficit increased dramatically.However,during the late 1990s the budget deficit shrank-in fact,moving to surplus-at the same time that the U.S.trade deficit increased significantly.Since 2000,the budget deficit has increased significantly,particularly after 2008.What is the relationship between a country's trade balance and its stance as a borrower or lender? Historically,has the U.S.been a net lender or net borrower? Why do you think that this is? Do you think that the U.S.budget situation might have anything to do with this?
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VerifiedCountries that run trade deficits must borrow from other countries to pay for this.Thus,countries that run trade deficits are net borrowers.The huge budget deficits in the U.S.coupled with its high levels of consumption (and low savings)have led it to becoming the largest debtor nation in the world.Large trade deficits have occurred during the same time that the U.S.has also been running large budget deficits,indicating that there may well be some cause and effect between the two.
What determines the rate of growth in output over periods of one or two decades? Over longer periods such as a century?
(90) VerifiedQuestions 1 and 3 are primarily short-run issues,2 and 4 are long-run issues.
Explain the difference between macroeconomic variables that are in terms of levels and growth rates.Which important macroeconomic variables are which? Which one is the unemployment rate?
(69) VerifiedVariables such as GDP and the price level are in terms of levels.Inflation and GDP growth are in terms of growth rates,meaning that they are measured between two different points in time.Unemployment rates are a percentage,but the unemployment rate is not a growth rate because it is not measured over time.
What is meant by real Gross Domestic Product? How do you think that you calculate a real statistic?
(89) We measure economic growth by the percentage change in real GDP.In general terms outline the course of the U.S.output growth rate in recent decades,both in terms of its trend and its changes around trend.Pay particular attention to the stability of the growth rate.
(71) In general terms describe trends in the inflation rate,considering the period since 1953.How are these trends related to movements in the inflation rate over this period?
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