Intermediate Macroeconomics 220:321 Spring 2015
Midterm I Exam
Instructor: Youngseok Park
(1) (4 pts.) Busch Economy consumed 5 breads, 2 books, and 3 cars in 2013; it consumed
6 breads, 3 books, and 4 cars in 2014. In 2013, breads cost $3 each, books cos
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Intermediate Macroeconomics 220:321 Spring 2015
Final Exam
Instructor: Youngseok Park
Instruction: You have 120 minutes. Read each question thoroughly before you start solving
it. Write legibly please. You can use a calculator but no books/notes/other ele
Intermediate Macroeconomics 220:321 Spring 2015
Homework 2
Instructor: Youngseok Park
(1) Economists occasionally speak of helicopter money as a short-hand approach to
explaining increases in the money supply. Suppose the Chairman of the Federal Reserve i
Intermediate Macroeconomics 220:321 Spring 2015
Homework 4
Instructor: Youngseok Park
(1) Assume that a countrys production function is Y = K 1/2 L1/2 . Assume an economy
with no technological progress and no population growth.
a. What is the per-worker p
P
P] "'~ I - - - 5mm
I
I
P 2.
Pa, d~a-=a=% «muE mmmmmmmmmmm ~5P 4,53
t V #th
l "W: ,
Y1 YE 1
In the short run, output decreases, while the price level remains unchanged. In the long
run, prices decrease and output returns to the fullemployment level.
LRA
Chapter 2
THE DATA OF MACROECONOMICS
Instructor Youngseok Park
INTRODUCTION
THREE IMPORTANT MACROECONOMIC DATA
The three statistics that economists and policymakers use most often:
GDP(Gross Domestic Product)
CPI(Consumer Price Index)
Unemployment rate
1.
Chapter 1
THE SCIENCE OF MACROECONOMICS
Instructor Youngseok Park
MOTIVATION
REAL GDP
MOTIVATION
INFLATION RATE
MOTIVATION
UNEMPLOYMENT RATE
MOTIVATION
THEORY AS MODEL BUILDING
- Endogenous variables: What a model tries to explain.
- Exogenous variables:
Intermediate Macroeconomics
Dong-Whan Ko
Unconventional Monetary Policy
As the central bank of the United States, the Federal Reserve conducts monetary policy in
order to maintain its dual mandate: high employment and price stability. The Fed generally ha
Intermediate Macroeconomics
Dong-Whan Ko
Raising Americas Wages
In every Introduction to Economics class, students are taught the basics of price controls
such as price floors and price ceilings. One of the most basic examples of a price floor given
invol
l, a. Both countries have a natural rate of unemployment of 5 percent, and the slope of
the Phillips curve is the same in both countries. The Phillips curves in both
countries indicate a shOIt-run tradeoff between more ination and less
unemployment.
b. Th
Intermediate Macroeconomics 220:321 Spring 2015
Homework 8
Instructor: Youngseok Park
(1) Assume the following model of the economy, with the price level xed at 1.0:
Y =C +I +G
C = 0.8(Y T )
I = 800 20r
T = 1000
G = 1000
Ms
Md
=
= 0.4Y 40r
P
P
Ms = 1200
a
i.
a.
/ '
ail/lria/LQQJCTédQ 014M"? \ v 1061 V/<
Y: 5,000 1007*.
Y: 3,000 + 1007'.
In the short-run equilibrium, Y: 4,000; r = 10; Y~ T: 3,000; C = 2,400; I = 600; private
saving is 600; public saving is 0; and national saving is 600.
Y increases by 50
Intermediate Macroeconomics 220:321 Spring 2015
Homework 9
Instructor: Youngseok Park
(1) The Phillips curve in Lowland takes the form of = 0.04 0.5(u 0.05), where
is the actual ination rate and u is the unemployment rate. The Phillips curve in
Highland
Intermediate Macroeconomics 220:321 Spring 2015
Homework 7
Instructor: Youngseok Park
(1) The advent of interest-earning checking accounts in the early 1980s led many households to keep a larger proportion of their wealth in checking accounts. Use the
agg
Intermediate Macroeconomics 220:321 Spring 2015
Homework 6
Instructor: Youngseok Park
(1) Assume that population grows at rate of n and the rate of depreciation of capital is
, and there is no technological progress. k = sf (k) ( + n)k shows the change in
Intermediate Macroeconomics 220:321 Spring 2015
Homework 1
Instructor: Youngseok Park
(1) Assume that the production function is given by Y = AK 0.5 L0.5 , where Y is GDP,
K is capital stock, and L is labor. The parameter A is equal to 10. Assume also tha
Intermediate Macroeconomics 220:321 Spring 2015
Homework 5
Instructor: Youngseok Park
(1) An economy described by the Solow growth model has the following production
1
function: y = k 2 .
a. Solve for the steady-state value of y as a function of s, n, g,