DARTMOUTH COLLEGE DEPARTMENT OF ECONOMICS ECONOMICS 22 MACROECONOMICS PROFESSOR AVNER BAR-ILAN SUMMER 2004 SECOND MIDTERM EXAMINATION August 13, 2004 Instructions: 1. Please write your name on the following blank. Name: 2. The first part of the exam
Economics 22: Assignment 1
Note: For problems 1 and 2 the data are available from the Bureau of Economic Analysis (BEA) web
site, http:/www.bea.gov/. The breakdown of GDP into components is located in the NIPA
(national income and product account
Economics 22 Feyrer
1. In the sticky-price model, describe the aggregate supply curve in the following special
cases. What implications does each cases have for monetary policy.
a. All firms have sticky prices.
b. The desired price does not depend o