Comments on Problem Set #4

On problem 2

For each part:

i. involves a shift in AD to a short run equilibrium away from Long Run AS.

ii. involves a government policy (fiscal or monetary) to shift AD back to
where it was before (i) happened (and return to long run equilibrium)

iii. involves government NOT doing anything but letting the input prices
adjust (up or down) and ulitmately move short run AS so that the economy
returns to long run equilibrium.

Make sure your cuve shifts and arguments are accurate.

You should find that parts A and B are opposites. That is what you figure
out for A, the opposite happens for B.

You should have at least one diagram for A and one diagram for B. I say at
least because for each part (i, ii, and iii) there is a curve shifting. One
diagram could get busy. I would suggest that you draw 2 diagrams for A and
2 diagrams for B. Note how the problem is set up. An event (i) happens.
Then either we employ policy (ii) or leave it to self adjust (iii). So
draw one diagram showing the policy intervention after (i) happens, then
draw another diagram showing the leave-it-alone (laissez faire, classical)
adjustment after (i) happens.

Homework #4

According to the syllabus the next homework is due on Thursday. However, I neglected to prepare a handout for the class.

The assignment has been placed on the I-drive. It will be due Tuesday, May 2. That is the last day of class. Please be aware that it is very likely it will not be graded by the time of your exam. However, solutions will be provided that last day of class. Also, since solutions will be distributed in class, the assignment will be due at the beginning of class unless I alter that at classtime. However, no late completed homeworks will be accepted after class dismissal.

It's all fair.

Stay tuned for updates regarding the problems on the problem set.

JJ

How are the grades looking?

I tabulated points and percentage scores "to date", that is, up to and including the third test. It looks like the distribution is pretty much "on target". The overall mean is 79.1% with a standard deviation of about 10%. So as a guideline, use the 90-100% for A's, 80-89.9 for B's, etc.

All in all: Looking good.

Finish strong.

Article Review #2

As mentioned in class today, I've posted the next article review assignment. A copy of the handout "Econ 121 Article #2" is available on my I-drive. (I:jjulian)

The article, Time Well Spent, is also available on the I-drive. Please read the handout clearly. As much as I'd like to say I clearly explain what the reading is (standard citation format at the top of the handout), a few people will read all of the annual report and comment on (a) the Dallas Fed's bank president's comments, which preceed the article, and (b) the staff lists and financial statements which follow the reading. Also, some people fail to read the entire article and read merely the first section thinking they have read it all. I think part of it is because they are not very careful during that night before it is due.

Study hint: Download the article. Read it. Think about it. Dwell on it for a few days. Then go write your paper.

Cheers!

Answer Key to Study Questions for Test #3

Here is the answer key. I put it together rather quickly. Let me know if you think any is wrong.

1-C, 2-A, 3-A, 4-B, 5-D, 6-A, 7-B,
8-A, 9-D, 10-D, 11-C, D-12, 13-C, 14-B, 15-D,
16-D, 17-A, 18-B, 19-D, 20-C, 21-D, 22-C,
23-C, 24-A, 25-C, 26-A,
27-B, 28-D, 29-D, 30-B.

Good luck. I'll be online later if you have any questions.

Problem Set #3

Please remember: You do not have to do problem #4 on the homework.

A copy of the assignment is on my I-drive.

Mitigating those China fears

If you find yourself a product of conventional wisdom, the Chinese will not be taking over our world by exploiting its cheap labor. They'll have to do it by paying them a better wage.

Read this NYT article on the Chinese labor shortage. (NYT registration is required. Registration is free, you just have to give up some private information. If someone really wants it contact me and I can email you a temporary link from the Times.)

http://www.nytimes.com/2006/04/03/business/03labor.html