Peter Schmidt
Review Questions Macroeconomics
From the presentations of BIM WS 2015/16
16.The Roots of Modern Macroeconomics
16.1 Name two Classical Approaches to fight Unemployment!
16.2 What is the role of the Government in Keynes Approach!
16.3 Explain the Multiplier Effect briefly!
16.4 Why is a Minimum Wage rather obstructive to bring many Young European Citizens into
Jobs?
17.Short-run Macroeconomic Equilibrium
17.1 Name at least three measures of the German Stimulus Packages during the financial crisis.
17.2 According to Keynes, how should market outcomes be influenced by the government?
17.3 What are the two ways of finding Equilibrium National Income?
17.4 Do you think Keynesian mechanisms were the right choice to fight the economic recession
during the financial crisis?
18.Money and Interest Rates
18.1 Name two advantages of digital money!
18.2 What is your opinion about replacing all the cash with digital money?
18.3 Do you think there are other possibilities for the central bank to decrease the high cash demand after losing the trust in the banks?
18.4 What is your opinion about what money´s value is built on?
18.5 Why could the Minimum Reserve be seen controversial in macroeconomic terms?
18.6 What could be a potential advantage of a relatively high Minimum Reserve?
18.7 What is the purpose of the Liquidity Coverage Ratio (LCR) and what challenges might banks
face, adopting the new regulations?
19. The Relationship between the Money and Goods Markets
19.1 What characterizes a hyperinflation?
19.2 Who gains from an inflation?
19.3 Name two reasons that cause an inflation
20. Fiscal and Monetary Policy
20.1 Name 2 examples of monetary policy
20.2 Explain one disadvantage and one advantage for a currency with low value compared to others (e.g. “new drachma”)
20.3 What was one of the main problems with the bank recapitalization?
20.4 From a macroeconomic point of view, are the support packages really supporting the economy of Greece?
21. Aggregate Supply, Unemployment and Inflation
21.1 Keynesians tend to be supply-side oriented and classical Monetarists are demand-side oriented? Correct or not and why?
21.2 Which type of inflation do we have in an economic boom and why?
21.3 Could there be a problem if we want to reflect the reality with theoretical models?
21.4 List three reasons for the stable current inflation
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Peter Schmidt
21.5 Why is the traditional short-run Phillips Curve not applicable anymore? Name three important factors of how economy changed in the last 3 years.
21.6 What has been the problem of the modified Phillips Curve (Samuelson and Solow)?
22. Long-term Economic Growth
22.1 What are the assumptions of the Solow Growth Model? Name two of them.
22.2 What are economies trying to do, to increase fast growth?
22.3 What are the negative side effects of economic growth?
22.4 Which level limits the infinite rise of the capital stock? – Explain!
22.5 Explain: How do investment and capital stock react when there is technological progress?
22.6 What could be the result of state-owned businesses and state-controlled investment opportunities?
23. Supply-side Policies
(no presentation)
24. International Trade
24.1 What are the two components of the law of comparative advantage?
24.2 What is the formula for terms of trade?
24.3 Name three positive arguments for the fair trade plant workers
24.4 Mention and describe one objective of free trade:
24.5 What kind of negative influences could free trade have?
24.6 Mention the advantages and disadvantages of the trade diversion:
25.The Balance of Payments and Exchange Rates
26. Global and Regional Interdependence
27. Economic Problems of Developing Countries
9th December
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