A student argues efficiency wages creating structural unemployment are bad for the economy. A more complete analysis recognizes:

A bank: Total assets = $50B; Total deposits = $44B; Other liabilities = $4B; Capital = $2B. What is the leverage ratio and the maximum asset decline before insolvency?

A union negotiates a wage of 35 euros/hour in manufacturing where the competitive equilibrium is 25 euros/hour. Workers displaced from manufacturing move to retail, where the equilibrium was 18 euros/hour. What is the expected effect on retail wages?

A plague kills 30% of the population but leaves total stocks of K, H (human capital embodied in survivors), and N unchanged. Assuming A is also unchanged, what happens to Y/L?

Which COMBINATION of forces caused SVB’s 2023 insolvency?

Adult population = 260M; Labor force = 168M; Employed = 161M. NRU = 4.2%. What is the cyclical unemployment rate and what does its sign imply?

A government economist argues: ‘We should build more roads to permanently raise our long-run growth rate.’ A critic responds correctly that:

Country Alpha and Country Beta both start with GDP per capita of $5,000. Alpha grows at 2% per year; Beta grows at 5% per year. Approximately how many years will it take for Beta’s GDP per capita to be AT LEAST DOUBLE Alpha’s?

A student proposes: (1) Lower the reserve ratio from 15% to 5%; (2) Print money to fund government infrastructure (roads); (3) Subsidize university education. Evaluate each component’s effect on LONG-RUN price level and LONG-RUN real GDP per capita.

In 2021, the Fed expanded M2 by approximately 26%. Real GDP grew approximately 5.7%. Using pi = % change M – % change Y and assuming stable velocity, what inflation rate does the theory predict, and how does this compare to actual CPI inflation of 4.7% in 2021?