Econ304FnlRev - The Pennsylvania State University...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
The Pennsylvania State University Spring 2007 Department of Economics Clifford Review Sheet for Last Section of Course FINAL EXAM: Wednesday, May 9, 12:20 – 2:10 PM, 100 Thomas Note: The final exam will cover Chapters 10, 11 and 6. Obviously, you will need to be comfortable with the material in Chapter 9 as well. Part I: Review Questions (You should also review the analytical homework problems.) 1. Define the term money neutrality . Explain why money is neutral in the classical model. 2. Illustrate graphically and explain the derivation of the aggregate demand curve from the IS and LM curves. 3. How would each of the following factors shift the aggregate demand curve? Explain. a. an increase in expected future output. b. an increase in government purchases. c. an increase in taxes. d. an increase in the future marginal product of capital. e. an increase in the nominal money supply. f. an increase in expected inflation. g. an increase in the risk of non-monetary assets. 4. Define the terms real shocks , nominal shocks and productivity shocks . 5. What are the two main features of the real business cycle (RBC) approach to explaining business cycles? 6. Explain what happens to the important macroeconomic variables when there is a productivity shock. Are these predictions consistent with business cycle facts? Explain. 7. Explain what happens to the important macroeconomic variables when there is a fiscal shock (change in G). Are these predictions consistent with business cycle facts? Explain. 8. How do RBC theorists explain the countercyclical behavior of the unemployment rate? 9. How does the “reverse causality” story explain the procyclical and leading behavior of the money supply?
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
10. How does the “misperceptions” story explain the procyclical and leading behavior of the money supply? Does it make a difference whether the changes in the money
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 10/29/2008 for the course ECON 304 taught by Professor Stone,mistyriano,alejandro during the Spring '07 term at Pennsylvania State University, University Park.

Page1 / 5

Econ304FnlRev - The Pennsylvania State University...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online