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401ps2answers-10 - ECON 401A Autumn 2010 ANSWERS FOR...

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ECON 401A Hartman Autumn 2010 ANSWERS FOR PROBLEM SET II 1.a. 4 2 75 5 5 M Y T G P and 8 1 15 50 5 50 M r T G P If G increases and T , M , and P do not change, then 1 0 Y G and 1 0 5 r G . If G and T increase by the same amount with no change in M and P, then ( / ) 0 1 0 5 dG dT dX d M P dY dX and ( / ) 0 2 0 50 dG dT dX d M P dr dX . If M increases with no change in P , G , and T , then 2 0 5 Y M P and 1 0 50 r M P   . 1.b. * 100 Y and * 15% r 1.c. 25 N 1.d. The marginal product of labor is 2. 4 W . Unemployment is 15. 1.e. 2.5298 W . 2. 0 0 ' 0 (1 ) dT dG dP I Y P L L M C I i Y , 0 0 1 0 (1 ) dT dG dP C r P L L M C I i Y ( / ) 0 (1 ) 0 (1 ) dT dG dX d M P L C Y i L L X C I i Y
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