ps10 - Economics 202 Principles of Macroeconomics Name...

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

View Full Document Right Arrow Icon
Economics 202 Name: _______________ Principles of Macroeconomics Professor Melick Problem Set #10 Due Friday May 2, 2008 1. Using the attached Figure 1 and the assumption of a classical model with misperceptions for an open economy illustrate and explain the short-run and long-run effect on only the domestic economy of a sharp drop in GDP in the rest of the world ( ) For Y . In each of the six graphs show only three points, an initial general equilibrium before the change in For Y (labeled point A), the short-run equilibrium after the change in For Y (labeled point B), and the new long-run general equilibrium (labeled point C). Discuss what happens to the current account, real exchange rate and nominal exchange rate for the domestic economy. For consistency, start the domestic economy off with a current account deficit.
Image of page 1

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

View Full Document Right Arrow Icon
2. Using the attached Figure 2 and the assumption of a classical model with misperceptions for an open economy illustrate and explain the short-run and long-run effect on only the domestic economy of a sharp increase in the money supply in the domestic economy.
Image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern