This preview shows page 1. Sign up to view the full content.
Unformatted text preview: 3. Do problem #3 in the section on “Working with Macroeconomic Data” on p. 564 in Chapter 14 of the textbook. The three-month Treasury bill rate can be found at: http://research.stlouisfed.org/fred2/series/TB3MS/116/Max. Use the unem-ployment rate data that you studied in the ﬁrst problem on Homework #5 and in the fourth problem on Homework #7. (Hint: How do changes in the money supply aﬀect the interest rate and the level of output in the short run in the Keynesian model?) 4. Do numerical problem #8 on p. 599 in Chapter 15 of the textbook. To ﬁnd the inﬂation rate that maximizes seignorage, use calculus rather than drawing a graph. That is, express real seignorage revenue as a function of the inﬂation rate π , take the derivative of seignorage with respect to π , set the derivative equal to 0, and solve for the optimal value of π . 1...
View Full Document
This homework help was uploaded on 04/06/2008 for the course ECON 154 taught by Professor Bjoernbruegemann during the Spring '07 term at Yale.
- Spring '07