Assume Again That Barker Company Has Sufficient Capacity to Produce 100,000 Zets Each Year. the Company Has an Opportunity to Sell 20,000 Units in an Overseas Market. Import Duties, Foreign Permits, and Other Special

MACROECONOMICS ASSIGNMENT 10 CLASS 11:15

CHAPTER 17: GROWTH AND PRODUCTIVITY: LONG-RUN POSSIBILITIES

1. IN WHAT SPECIFIC WAYS (IF ANY) DOES A COLLEGE EDUCATION INCREASE A WORKER’S PRODUCTIVITY? (note that the fourth word in this question is plural)

ANSWER:

1. Workers get more knowledge and skills

2. Technological advance and research

3. More capital: an increase in the ratio of capital labor

4. Improved Management: better use of available resources in the production process.

2. WHY DO PRODUCTIVITY GAINS SLOW DOWN IN RECESSIONS? (SEE FIGURE 17.5) SEE IF YOU CAN COME UP WITH 2 OR 3 REASONS.

Women and children enter to work. They had no skills and it was their first time at work. They had no adequate mechanisms to increase productivity.

3. SHOULD WE GRANT IMMIGRATION RIGHTS BASED ON POTENTIAL CONTRIBUTIONS TO ECONOMIC GROWTH AS CANADA DOES?

Yes, because it’s going to be a gain if they target high skilled people it will be a

Valuable human capital but I think USA needs all sort of diverse productive human capital.

CHAPTER 18: THEORY VERSUS REALITY

1. WHY DO POLICY MAKERS RESPOND SO SLOWLY TO ECONOMIC PROBLEMS?

The process is too long. And it takes time to know what’s going on and measure the economy failures. The regulation is managed by the congress, the president and executive agencies and it takes time to have an approval or an action from all theses entities.

2. SUPPOSE THE ECONOMY IS SLUMPING INTO RECESSION AND NEEDS A FISCAL POLICY BOOST. VOTERS, HOWEVER, ARE OPPOSED TO LARGER FEDERAL DEFICITS. WHAT SHOULD POLICYMAKERS DO?

ANSWER:

Nothing, the best response to a recession is patience. As sales and output slow, interest rates will decline, and new investment will be stimulated