CORNELL UNIVERSITY Professor Levon Barseghyan Econ 314-1 First Mid-Term Exam
The answers should be short and straight to the point. First provide the answer, and then briefly explain how you got this answer. 1. (30 points) A country with its economy
Economics 314-1 Problem Set 2 Due in Section Wednesday October 6, 2010 1. Consider a small open economy described by the following equations: Y = C + I + G + NX, Y = 6,000, G = 1,500, T = 1,000, C = 500 + 0.6(Y T), I = 1,000 - 100r NX = 1000 - 500 r = r*
Macroeconomics 314-1 Professor Levon Barseghyan Midterm What to expect 1. Suppose the economy is initially at a steady state, and that some of the nations capital stock is destroyed because of a natural disaster or a war. a. Determine the long-run e
econ 3140-2 problem set one due Friday, January 30 attempt all questions
1
Consider the following statements: a) Following well-known principles, the development of alternative energy technology like wind power, solar power and biofuels, requires the comm
Economics 314-1 Problem Set 3 Due in Section Wednesday Oct. 27
Fall 2010
Question 1: An economy begins in long-run equilibrium, and then a change in government regulations allows banks to start paying interest on checking accounts. Recall that the money s
Economics 314-1 Problem Set 4 Due on Wednesday November 10
Fall 2010
Question 1: Suppose that an economy has the Phillips curve = -1 -0.4(u 0.05). a. What is the natural rate of unemployment? b. Graph the short-run and long-run relationships between infla
Economics 3140: Suggested Solutions to HW
9
TA: Yan Li
April 30, 2009
1
1. [(a)]
2. Decrease in real money demand
3. Increase in real money demand
4. Increase in real money demand
5. Increase in aggregate money demand (economy wide money demand)
6. Increa
Economics 314-1 Problem Set 5 Suggested Solutions
Fall 2010
Question 1: (Chapter 16, Question 4) A rule requiring a cyclically adjusted balanced budget has the potential to overcome, at least partially, the first two objections to a balanced-budget rule t
Economics 314-1 Problem Set 3 Suggested Solutions
Fall 2010
Question 1:
a. Interest-bearing checking accounts make holding money more attractive. This change increases the demand for money. b. The increase in money demand is equivalent to a decrease in th
Economics 314-1 Problem Set 2 Suggested Solutions
Fall 2010
Question 1: a. National saving is the amount of output that is not purchased for current consumption by households or the government. We know output and government spending, and the consumption f
Cornell University Fall 2010 Economics 3330: Problem Set 5 Due 10/14/10
There are three assets: a stock fund, a bond fund, and a risk-free T-bill money market fund that yields a sure return of 5.5%. The stock fund has an expected return of 15% with standa
Cornell University Fall 2010 Economics 3330: Problem Set 4 Solutions
1. True/False/Explain State whether each of the following is true or false and explain your answer. Please limit your explanations to no more than two sentences. a. The rule of 72 holds
Cornell University Fall 2010 Economics 3330: Problem Set 3 Solutions
1. Coupon Renegotiation (Question 20 of Chapter 14 of the text, modified) A 10-year bond of a firm in severe financial distress has an annual coupon of $80 and sells for $500. The firm i
Economics 314-1 Problem Set 4 Suggested Solutions Questions 1:
Fall 2010
1. The economy has the Phillips curve: = -1 0.4(u 0.05). a. The natural rate of unemployment is the rate at which the inflation rate does not deviate from the expected inflation rate
Economics 3140: Suggested Solutions to HW
10
TA: Yan Li
May 5, 2009
1
IS-LM Model
From the handout, we have two equations:
Y (1
1)
M
P
=
0
=
Y
i
+
1
0
+G
1i
(1)
(2)
= 0:01; 0 = 10; 1 = 0:5; 0 = 20; 1 = 500; Y = 300:
(1) (G; ; M ) = (200; 100; 100):From (1
econ 3140-2 problem set four due Friday, February 27 attempt all questions
1
Let f (k) = 3k 0.4 . The population growth rate is 5% and the depreciation rate on capital is 10% a.) Calculate kmax , the maximum sustainable capital to labor ratio in the econo
econ 3140-2 problem set two due Friday, February 6 attempt all questions
1
Below are two wage distributions. The first is the distribution of nominal weekly wages for all US workers. The second is for US workers whose have a college degree, but no higher
Economics 3140 Final Exam Solution
(December 16, 2008)
1. (15 points, The AK model)
The AK model differs from the standard Solow model in that the production function in the AK model is simply Y = AK with A > 0. In the
AK model, when the labor input is co
Economics 3140: Suggested Solutions to HW
8
TA: Yan Li
April 21, 2009
1
Problem 1
According to the gures 8.9-8.12 in Book1, Consumption and Investment are
procyclical, but the volatility of investment is higher. The real wage rate and
the rental rate are
Solutions to HW 7
TA: Yan Li
April 7, 2009
Question 1:
(1) Given utility function:
u(1
p
lyt ; cot+1 ) = 0:5 1
p
lyt + 0:5 cot+1
Budget Constraint:
cot+1 = (1 + rt+1 )(1
)wt lyt
Substituting for cot+1 from the budget constraint into the utility function,
Suggested Solutions to Prelim 2
TA: Yan Li
March 31, 2009
Question 1:
From c0 + c1 = 1, we can get c0 = 1
c1 . Now the individual maximizes
U (c1 ) = 0:5(1
c1 ) + 0:5c1
= 0:5 + 0:5(1
)c1
(1) If 1
> 0, or 0 < < 1;then c0 = 0; c1 = 1 .
(2) If 1
< 0, or > 1
CORNELL UNIVERSITY Professor Levon Barseghyan Econ 314-1 First Mid-Term Exam
The answers should be short and straight to the point. First provide the answer, and then briefly explain how you got this answer. 1. (30 points) A country with its economy