史蒂芬-威廉森-宏观经济学-第四版-课后题答案-最新solution-ch5.pdf

Chapter 5 A Closed-Economy One-Period Macroeconomic Model Textbook Question Solutions Questions for Review 1. A closed economy is easier to work with. Opening the economy does not change most of the properties of an economy. The closed economy is the correct model for the world as a whole. 2. Government levies taxes and purchases consumption goods. 3. In a one-period model, there can be no borrowing or lending. There is therefore no way to finance a government deficit. 4. Endogenous variables: C, N s , N d , T, Y, and w. 5. Exogenous variables: G, z, K . 6. The representative consumer chooses C and Ns to maximize utility. The representative firm chooses N d to maximize profits. Market-clearing: N s N d N . Government budget constraint: T G. 7. The slope of the production possibilities frontier is equal to −MP . The slope of the production N possibilities frontier is also identified as −MRTl ,C , where MRTl ,C is identified as the marginal rate of transformation between leisure and consumption. 8. The competitive equilibrium is Pareto optimal because it lies at a tangency point between the production possibilities frontier and a representative consumer’s indifference curve. 9. The first theorem: A competitive equilibrium can be Pareto optimal. This theorem assures us that the competitive equilibrium is a good outcome. The second theorem: A Pareto optimum is a competitive equilibrium. This theorem allows us to directly analyze Pareto optima with the assurance that these points are also competitive equilibriums. The second theorem is useful because Pareto Optima are often easier to work with than competitive equilibriums. ©2011 Pearson Education, Inc. Publishing as Addison Wesley