Tutorial6questions - cash-in-advance CIA constraint 1 i List the three properties that money must have ii Write down the cash-in-advance constraint

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EC2102 Macroeconomic Analysis I Tutorial 6, Week 10, March 21-25, 2011 Question 1 Let us consider the monetary intertemporal model studied in class. Suppose that the economy is initially in an equilibrium. Equilibria in the labour, goods, and money markets in time period 1 are illustrated below. Explain your results carefully and in detail. Question 2 (Sem I AY2005±2006 EC2102 Final Exam Question 2) Consider the monetary intertemporal model that we studied in class where there is a
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Unformatted text preview: cash-in-advance ( CIA ) constraint. 1 ( i ) List the three properties that money must have? ( ii ) Write down the cash-in-advance constraint for time period t , making sure you have carefully de&ned all the variables used. Which of the three properties of money listed in part ( i ) is the de&ning characteristic of money in this model? ( iii ) What is the representative consumer±s budget constraint in time period t ? ( iv ) Why is the representative consumer±s budget constraint in time period t di/erent from his cash-in-advance constraint in time period t ? 2...
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This note was uploaded on 01/18/2012 for the course ECONOMICS 2102 taught by Professor Tan during the Spring '11 term at National University of Singapore.

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Tutorial6questions - cash-in-advance CIA constraint 1 i List the three properties that money must have ii Write down the cash-in-advance constraint

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