Graduate Macroeconomics I: Final
Prof. Vollrath
December 7th, 2009
Instructions:
Write your answers on blank paper. Start each problem on a new sheet. Write your
name and the problem number on EVERY page. Number every page.
Read the whole problem before you start answering. Make sure you answer all the parts of each
problem. If the problem asks you to graph something, graph it and label the axes correctly.
You have 180 minutes for the exam. Make sure you at least right down some ideas about how
the problem should be answered if you cannot Fgure out a mathematical answer. You will need a
calculator.
There are a total of 100 points.
Problem 1 (25 points):
This is an open economy problem.
±or simplicity, the consump
tion/savings decision is Fxed, so a country saves a fraction
s
of their GNP. GDP is determined
by
y
=
k
1
/
2
. Depreciation is
δ
= 0. The world interest rate is given by
r
A
.
(A) What is GDP given the world rate
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 '05
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 Economics, Macroeconomics, Steady State, net foreign assets, Prof. Vollrath

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