This preview shows pages 1–2. Sign up to view the full content.
University of Minnesota
Department of Economics
Econ 3102 – 001: Intermediate Macroeconomics
Homework 4
This problem set (PS) is due on Wednesday, November 26 at the beginning of class. The maximum score is
103 points. Be sure to review the Syllabus about homework assignments and their grading.
Feel free to
contact me via email if you have speciﬁc
questions about the HW assignment.
Note that some Exercises have several parts, and each part may conceal more than one task for you. Be sure
to answer every question
thoroughly
for full credit!
Question 1 (14 points)
Graphically derive all the diagrams(labor market, goods market, money market) of the real intertemporal
model of chapter 10. Make sure to justify the shapes of all the curves you draw.
Question 2 (18 points)
Consider the real business cycle model:
a) What is the motivation behind the model? (
Hint
: TFP)
b) Graphically illustrate what happens if both
z
and
z
0
go up.
c) Is this model able to explain procyclicality of nominal money supply? If yes, prove this. If no, what
This preview has intentionally blurred sections. Sign up to view the full version.
View Full Document
This is the end of the preview. Sign up
to
access the rest of the document.
 Summer '05
 none
 Macroeconomics

Click to edit the document details