Macroeconomics
Answer each in no more than a single page, double-spaced, EACH.
1. How does the value-added concept assist in avoiding double-counting in the measure of Gross National or Domestic Product? Discuss.
2. Describe the principle of comparative advantage in a manner that convinces me that you truly understand it – which is a tall order.
Now explain how, at least under the bilateral trading framework envisioned by this theory, it is possible to have a place in the global arena without actually achieving absolute advantage in any line of business. [This question is worth three points extra credit for attempting.]
3. Define total factor productivity and explain how it relates to economic growth.
4. Define and describe the so-called “three prices of money.” How do changes in the money supply affect each.
