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 threemonth Treasury bill rate can be found at: http://research.stlouisfed.org/fred2/series/TB3MS/116/Max. Use the unemployment 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...
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 Spring '07
 BjoernBruegemann
 Economics, Macroeconomics, Inflation, Monetary Policy, Fed, Keynesian Model

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