ECON 3140 INTERMED MACROECON Cornell

Net exports, real exchange rate, demand for imports and exports1. the real exchange rate is related to NX. When the real exchange rate is lower, domestic goods are less expensive relative to foreign goods and net exports are greater. 2. The trade bal

Chapter 1 Real GDP- measures the total income of everyone in the economy, adjusted for inflation. Inflation rate- measures how fast prices are rising. Unemployment rate- measures the fraction of the labor force that is out of work. Deflation- is a pe

Chapter 6 Natural rate of unemployment- the average rate of unemployment around which the economy fluctuates. L= E + U Rate of Unemployment = U/L Frictional Unemployment- the unemployment caused by the time it takes workers to search for a job. Secto

Part II: Model solving (1 hour total) 1. Assume that a closed economy is described by the IS curve Y = 3,600 + 3G - 2T - 150r and the LM curve Y = 2M/P + 100r [or r = 0.01Y - 0.02(M/P)]. The investment function for this economy is 1,000 - 50r. The co

Handout 1 1. CRS: Cobb-Douglas function 2. Constant factor shares: Cobb-Douglas function and A (2 K) (2 L)1 = A 2 K 21 L1 = 2 A K L1 . The capital income = MP K K = A K 1 L1 K = A K L1 , 3. Growth accounting: Take logarithm

Chapter 1 Real GDP- measures the total income of everyone in the economy, adjusted for inflation. Inflation rate- measures how fast prices are rising. Unemployment rate- measures the fraction of the labor force that is out of work. Deflation- is a pe

Part II: Model solving (1 hour total) 1. Assume that a closed economy is described by the IS curve Y = 3,600 + 3G - 2T - 150r and the LM curve Y = 2M/P + 100r [or r = 0.01Y - 0.02(M/P)]. The investment function for this economy is 1,000 - 50r. The co

CORNELL UNIVERSITY Professor Levon Barseghyan Econ 302 Second Mid-Term Exam The answers should be short and straight to the point. First provide the answer, and then briefly explain how you got this answer. 1. (30 points) Suppose that the price leve