2010-ECON 202 L24 - ECON202 Viv Hall, SEF VUW L24 ECON 202,...

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ECON202 Viv Hall, SEF VUW L24 ECON 202, 2010 - WRAP UP 1. The End-year Exam, 2010 2. Summing Up, primarily L11 to L23
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ECON202 Viv Hall, SEF VUW The End-year Exam, 2010 End-year Exam Information, 2010 - Please see the “End-year exam info.” document , available from Blackboard .
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ECON202 Viv Hall, SEF VUW Summing Up, L11 to L24 : (1) L11, L12 We turned to the Supply Side ( labour market , and supply side of the goods market ( AS )). Wage setting ( WS ) ( Efficiency Wages ), and Price Setting ( PS ) ( Mark up ) allowed us to derive the natural rate of un employment or the natural level of em ployment, and the natural level of output and, and subsequently the AS curve and a Phillips Curve ( EAPC ), e.g. for WS and PS. (-) (+) W = P e F( u , z ) Wage Setting (WS) W = P/(1 + μ ) Price Setting (PS)
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ECON202 Viv Hall, SEF VUW Summing Up, L11 to L24 : (2) L11, L12 W/P WS PS U n N n L Level of em ployment, N
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ECON202 Viv Hall, SEF VUW Summing Up, L11 to L24 : (3) L14 – L16 For the AD component, remember first the fixed price IS-LM- The floating exchange rate equations: IS: Y = C(Y-T) + I (Y,i) + G + NX(Y,Y*,E) LM: M/P = Y L(i) UIP: i = i* - (E e E)/E, or E = E e (1+i)/(1+i*) Diagrammatically: i LM i (given M,P) UIP (given i*,E e ) IS (given T,G, Y*,i*) Y E
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ECON202 Viv Hall, SEF VUW Summing Up, L11 to L24 : (4) L14 – L16 For the AD component, remember first the fixed price IS-LM- The fixed exchange rate equations ( reflecting E e = E = Ē ): IS: Y = C(Y-T) + I (Y,i*) + G + NX(Y,Y*, Ē ) LM: M/P = Y L(i*) Diagrammatically: i LM i IS Y Ē
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2010-ECON 202 L24 - ECON202 Viv Hall, SEF VUW L24 ECON 202,...

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