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What is demand? What does it mean supplier-induced demand? What makes this type of
demand different from other types of demand? Explain the reasons why supplier induced
demand is common in the health care market.
5. Summarize the behavior of U.S. federal government budget deficits and U.S. merchandise trade deficits since 1953. Does this behavior suggest a relationship between the two defi cits? Perhaps at some times and not at others?
3. There were several shifts in the output-inflation relationship over the 1953-2010 period. Explain the nature of these shifts.
ment of these rates over this period more closely resemble those of the 1970s or those of the 1950s and 1960s?
1. Provide examples of the types of policy questions that macroeconomists ask. Why would macroeconomists disagree on these questions?
9. Suppose a worker's income was $15,000 in 1960 and $45,000 in 2010. Using the GDP deflator as a price index, calculate whether the worker's real income had increased or decreased over this period.
8. Explain the concept of potential output. Why is potential output difficult to measure?
7. Explain the concept of chain-weighted real GDP. What problems with the previous measure
of real GDP led to the introduction of this new measure?
5. Three price indices were considered in this chapter: the GDP deflator, the CPI, and the PPL Explain the differences among these different measures of the price level.
The population in country C decreases, due to a lower birth rate. At the same time, there is an increase in the cost of fertilizer, which is used to grow vegetables. Explain how the market for vegetables will be affected by these changes. Clearly indicate how the equilibrium price and equilibrium quantity will be affected by these changes. Make use of a combination of diagrams and verbal explanation to explain your answer. Note that your diagrams should be properly annotated and that marks will be deducted for any missing labels on your diagram.
