comp1_07 - Dietrich Vollrath and Bent E. Srensen June 27,...

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

View Full Document Right Arrow Icon
Dietrich Vollrath and Bent E. Sørensen June 27, 2005 Comprehensive Exam in Macroeconomic Theory–Procedural Instructions (1) Write your answers only on the paper we will provide. (2) We will be distributing a numbered sign–in sheet in a moment. The number next to your signature will be your student number . (3) Every sheet of paper you turn in to us must have your student number written at the top–center of the sheet and circled . (4) Every sheet of paper you turn in to us must have a page number written at the top–right corner of the sheet. (5) When you have finished, or when it is 1:00 pm (whichever comes first), prepare a cover sheet for your exam. This cover sheet should not have a page number, but must have the following things on it: (a) Your student number at the top–center, circled. (b) The phrase “Macroeconomics Comprehensive Exam”. (c) The sentence “My last page is page number X”, where X is your total number of pages of answers. 1
Background image of page 1

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

View Full DocumentRight Arrow Icon
1. (30%) People live for two periods and maximize their lifetime utility of U = ln c 1 + ln c 2 . They have a discount rate of zero and there is a positive interest rate of r. Individuals have two options for their time. They can work or they can go to school. The time spent in school is denoted n , and the time they spend working is (1 - n ). Time spent in school creates human capital that can be used in the next period, according to the following formula, h t +1 = ( n t h t ) α x 1 - α , where x represents public education spending. Note that human capital in
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 11/10/2011 for the course ECON 601 at Cornell University (Engineering School).

Page1 / 3

comp1_07 - Dietrich Vollrath and Bent E. Srensen June 27,...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online