19.9: Self-Check Questions — Read

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Using the data in Table 19.3, rank the seven regions of the world according to GDP and then according to GDP per capita.

	Population (in millions)	GDP Per Capita	GDP = Population × Per Capita GDP (in millions)
East Asia and Pacific	2,006	$5,536	$10,450,032
South Asia	1,671	$1,482	$2,288,812
Sub-Saharan Africa	936.1	$1,657	$1,287,650
Latin America and Caribbean	588	$9,536	$5,339,390
Middle East and North Africa	345.4	$3,456	$1,541,900
Europe and Central Asia	272.2	$7,118	$1,862,384

Table 19.3 GDP and Population of Seven Regions of the World

What are the drawbacks to analyzing the global economy on a regional basis?

Create a table that identifies the macroeconomic policies for a high-income country, a middle-income country, and a low-income country.

Use the data in the text to contrast the policy prescriptions of the high-income, middle-income, and low-income countries.

What are the different policy tools for dealing with cyclical unemployment?

Explain how the natural rate of unemployment may be higher in low-income countries.

How does indexing wage contracts to inflation help workers?

Use the AD/AS model to show how increases in government spending can lead to more inflation.

Show, using the AD/AS model, how governments can use monetary policy to decrease the price level.

10.

What do international flows of capital have to do with trade imbalances?

11.

Use the demand-and-supply of foreign currency graph to determine what would happen to a small, open economy that experienced capital outflows.

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