MANUAL With Test - Part 1: Solution manual: pages 1-189 Part 2: Te...

SOLUTIONS

MANUAL With Test Bank for Macroe conomics Seventeenth Canadian Edition Christopher T.S. Ragan Part 1: Solution manual: pages 1-189 Part 2: Test bank: Pages 190-1692 1 / 4

Copyright © 2023Pearson Canada Inc.ii Contents

Part One: What Is Economics? 1

Chapter 1: Economic Issues and Concepts 3

Chapter 2: Economic Theories, Data, and Graphs 13

Chapter 3: Demand, Supply, and Price 25

Part Two: An Introduction to Macroeconomics 36

Chapter 4: What Macroeconomics Is All About 38

Chapter 5: The Measurement of National Income 45

Part Three: The Economy in the Short Run 52

Chapter 6: The Simplest Short-Run Macro Model 54

Chapter 7: Adding Government and Trade to the Simple Macro Model 65

Chapter 8: Real GDP and the Price Level in the Short Run 75

Part Four: The Economy in the Long Run 85

Chapter 9: From the Short Run to the Long Run: The Adjustment of Factor Prices 86

Chapter 10: Long-Run Economic Growth 96

Part Five: Money, Banking, and Monetary Policy 105

Chapter 11: Money and Banking 107

Chapter 12: Money, Interest Rates, and Economic Activity 115

Chapter 13: Monetary Policy in Canada 124

Part Six: Macroeconomic Problems and Policies 132

Chapter 14: Inflation and Disinflation 133

Chapter 15: Unemployment Fluctuations and the NAIRU 141

Chapter 16: Government Debt and Deficits 150

Part Seven: Canada in the Global Economy 159

Chapter 17: The Gains from International Trade 160

Chapter 18: Trade Policy 169

Chapter 19: Exchange Rates and the Balance of Payments 177

Part 1: Solution manual 2 / 4

Copyright © 2023Pearson Canada Inc.iii List of Boxes Applying Economic Concepts 1-1 The High Opportunity Cost of Your University Degree7 1-2 Economics Needs the Other Social Sciences21 2-1 Where Economists Work30 2-2 Can Economists Design Controlled Experiments to Test Their Theories? 34 3-1 Demand and Supply Shocks Created by the COVID-19 Pandemic64 3-2 Why Apples but Not iPhones?72 4-1 The Terminology of Business Cycles82 4-2 How the CPI Is Constructed89 5-1 Value Added Through Stages of Production104 5-2 Calculating Nominal and Real GDP115

6-1 The Simple Multiplier: A Numerical Example146

7-1 How Large Is Canada’s Multiplier?164 8-1 Analyzing the 2020 Pandemic Recession with the AD/AS Model191 10-1 What Does Productivity Growth Really Look Like?230 10-2 A Case Against Economic Growth232 10-3 Climate Change and Economic Growth254 11-1 Are Cryptocurrencies Really Money?267 11-2 Confidence and Risk in Canadian Banking276 12-1 Understanding Bond Prices and Bond Yields294 12-2 Three Propositions About Money Neutrality307 13-1 What Determines the Amount of Currency in Circulation? 324 14-1 Is Deflation the Cause or Result of a Weak Economy? 356 15-1 Stocks and Flows in the Canadian Labour Market378 15-2 Wage Flexibility and the Rise of the “Gig” Economy384 15-3 Unemployment and Policy During the “Pandemic Recession” 394 16-1 From World War to Global Pandemic: The Fall and Rise of Government Debt 420 17-1 Two Examples of Absolute and Comparative Advantage436 17-2 Comparative Advantage and Global Supply Chains444

18-1 Canadian Wine: A Free-Trade Success Story471

19-1 A Student’s Balance of Payments with the Rest of the World 482 19-2 Fixed Exchange Rates and Foreign-Exchange Reserves490 3 / 4

Copyright © 2023 Pearson Canada Inc.iv Lessons from History 8-1 The 1997–1998 Asian Crisis and the Canadian Economy192 9-1 Fiscal Policy in the Great Depression216 10-1 Should Workers Be Afraid of Technological Change?245 11-1 Hyperinflation and the Value of Money262 13-1 Two Views on the Role of Money in the Great Depression 332 16-1 The Modern Greek Tragedy of Debt Dynamics412 18-1 Tariff Wars and the Stark Lessons from the Great Depression 460 19-1 Mercantilism, Then and Now497 Extensions in Theory 3-1 The Distinction Between Stocks and Flows53 5-1 Arbitrary Decisions in National Income Accounting113 6-1 The Theory of the Consumption Function129 6-2 The Algebra of the Simple Multiplier148 9-1 The Phillips Curve and the Adjustment Process206 14-1 The Phillips Curve and Inflation Expectations362 17-1 The Gains from Trade More Generally434

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