Department of Economics
University of Maryland
Economics 325
Intermediate Macroeconomic Analysis
Midterm Exam – Part 1
Professor Sanjay Chugh
Fall 2008
October 14, 2008
NAME:
Part 1 of the Exam has a total of two (2) problems and pages numbered one (1) through four (4).
Each problem’s total number of points is shown below.
Your solutions should consist of some
appropriate combination of mathematical analysis, graphical analysis, logical analysis, and
economic intuition, but in no case do solutions need to be exceptionally long.
Your solutions
should get straight to the point –
solutions with irrelevant discussions and derivations will be
penalized.
You are to answer all questions in the spaces provided.
You may use one page (doublesided) of notes.
You may
not
use a calculator.
Problem 1
/ 25
Problem 2
/ 25
TOTAL PART 1
/ 50
TOTAL PART 2
/ 50
TOTAL
/ 100
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Problem 1:
Consumption and Savings in the TwoPeriod Economy (25 points).
Consider a
twoperiod economy (with no government), in which the representative consumer has no control
over
his
income.
The
lifetime
utility
function
of
the
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 Fall '08
 chugh
 Economics, Logic, Inflation, Utility, pretax real wages

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