ECON 3560/5040
Numerical Example (National Income)
Assume that GDP (Y) is 1,200. Consumption (C) is given
by the equation C = 125 + 0.75(Y T). Investment (I)
is given by the equation I = 200 10r, where r is the
real interest rate. Taxes (T) are 100 and go
ECON 3560/5040
Homework #11 (Answers)
Last Name:
,
First Name:
(1) [10 points] The Phillips Curve
Suppose that an economy has the Phillips curve
e
t = t 0.5(ut 0.06)
(a) [2 points] What is the natural rate of unemployment (un )?
un = 0.06 or un = 6%
(b) [
Intermediate Macroeconomic Theory /
Macroeconomic Analysis
(ECON 3560/5040)
Midterm Exam (Answers)
Part A (15 points)
State whether you think each of the following questions is true (T), false (F), or uncertain (U)
and briey explain your answer. No credit
ECON 3560/5040
Numerical Example (National Income)
Assume that GDP (Y) is 1,200. Consumption (C) is given by the equation C = 125 + 0.75(Y T). Investment (I) is given by the equation I = 200 10r, where r is the real interest rate. Taxes (T) are 100 and go
Final Exam (Answers)
(Part 1) 1 C 2 C 3 A 4 B 5 C 6 A 7 C 8 B 9 D 10 D 11 12 13 14 15 16 17 18 19 20 D B B A B C D B C C
(Part 2)
1. (A) The closed economy model correctly predicted that national saving would fall and the interest rate would rise. But, th
Midterm (Answers)
(Part 1)
1
2
3
4
5
6
7
8
9
10
D
B
C
D
B
C
A
C
C
B
11
12
13
14
15
16
17
18
19
20
B
B
D
D
C
B
D
B
C
A
(Part 2)
1. (A)
(B)
(C)
(D)
(E)
(F)
r=10
C=950, I=100
C=950, I=50, r=15
C=950, I=100, r=20
r=-6.5
r increases
2. (A) The labor demand cur
Intermediate Macroeconomic Theory / Macroeconomic Analysis (ECON 3560/5040) Final Exam (Answers)
Part A (15 points)
State whether you think each of the following questions is true (T), false (F), or uncertain (U) and briefly explain your answer. No credit
Intermediate Macroeconomic Theory / Macroeconomic Analysis (ECON 3560/5040) Midterm Exam (Answers)
Part A (15 points)
State whether you think each of the following questions is true (T), false (F), or uncertain (U) and briefly explain your answer. No cred
Intermediate Macroeconomic Theory / Macroeconomic Analysis (ECON 3560/5040) Midterm Exam
Part A (15 points)
State whether you think each of the following questions is true (T), false (F), or uncertain (U) and briefly explain your answer. No credit will be
ECON 3560/5040
Homework #10 (Answers)
Last Name:
,
First Name:
(1) [10 points] The Mundell-Fleming (IS LM ) Model
(a) [5 points] Suppose Congress cuts government spending in order to balance the budget.
Use the Mundell-Fleming model with oating exchange r
Intermediate Macroeconomic Theory /
Macroeconomic Analysis
(ECON 3560/5040)
Final Exam
Part A (15 points)
State whether you think each of the following questions is true (T), false (F), or uncertain (U)
and briey explain your answer. No credit will be giv
5
4.5
4
3.5
3
2.5
2
1.5
1
0.5
0
Title:
Series ID:
Source:
Release:
Seasonal Adjustment:
Frequency:
Units:
Date Range:
Last Updated:
Notes:
Federal Minimum Hourly Wage for Nonfarm Workers for the United States
FEDMINNFRWG
US. Department of Labor
Minimum Wa
ECON 3560/5040
Homework #2 (Answers)
Last Name:
,
First Name:
Part A (7 points) Fill-in Questions
(1) [2 points] If a rm hires an additional unit of capital while keeping other inputs constant, its
production increases by the Marginal Product of Capital (
ECON 3560/5040
Homework #3 (Answers)
Last Name:
,
First Name:
(1) [8 points] Eects of Fiscal Policy in the Long Run
Soon after his election in 1992, President Clinton proposed to reduce government spending
and increase taxes
(a) [2 points] What eect would
ECON 3560/5040
Homework #5 (Answers)
Last Name:
,
First Name:
Part A (6 points) Fill-in Questions
(1) [2 points] The steady state with the highest consumption is called the
Golden Rule level of capital
(2) [2 points] The number of eective workers takes in
ECON 3560/5040
Homework #1 (Answers)
Last Name:
,
First Name:
Part A (7 points) Fill-in Questions
(1) [3 points] Macroeconomics is the study of the economy as a whole. It focuses on issues such
as Economic Growth, Ination, and Unemployment
(2) [2 points]
ECON 3560/5040
Homework #6 (Answers)
Last Name:
,
First Name:
Part A (6 points) Fill-in Questions
(1) [2 points] When the Fed changes the money supply to oset an adverse supply or demand
shock and to keep output and employment at their natural levels, thi
ECON 3560/5040
Homework #4 (Answers)
Last Name:
,
First Name:
Part A (6 points) Fill-in Questions
(1) [2 points] The unemployment rate is calculated as the percentage of Labor Force that is
unemployed
(2) [2 points] Wage rigidity occurs when the real wage
ECON 3560/5040
Homework #7 (Answers)
Last Name:
,
First Name:
(1) [4 points] The Liquidity Preference Theory
Graphically illustrate the impact of an open-market purchase by the Federal Reserve on the
equilibrium interest rate using the theory of liquidity
Intermediate Macroeconomic Theory /
Macroeconomic Analysis
(ECON 3560/5040)
Midterm Exam
Part A (15 points)
State whether you think each of the following questions is true (T), false (F), or uncertain (U)
and briey explain your answer. No credit will be g
Intermediate Macroeconomic Theory / Macroeconomic Analysis (ECON 3560/5040) Midterm Exam (Answers)
Part A (15 points)
State whether you think each of the following questions is true (T), false (F), or uncertain (U) and briefly explain your answer. No cred
Intermediate Macroeconomic Theory /
Macroeconomic Analysis
(ECON 3560/5040)
Midterm Exam
Part A (15 points)
State whether you think each of the following questions is true (T), false (F), or uncertain (U)
and briey explain your answer. No credit will be g
ECON 3560/5040
Homework #6 (Answers)
Last Name:
,
First Name:
(1) [12 points] The Mundell-Fleming (IS LM ) Model
(a) [6 points] Suppose Congress cuts government spending in order to balance the budget.
Use the Mundell-Fleming model with oating exchange ra
ECON 3560/5040
Homework #5 (Answers)
Last Name:
,
First Name:
(1) [15 points] The IS-LM Model
Use the IS LM model to illustrate graphically the impact on output (Y ) and interest rate
(r) of each of the following economic events.
(a) [5 points] The Fed ke
ECON 3560/5040
Homework #4 (Answers)
Last Name:
,
First Name:
(1) [5 points] The Liquidity Preference Theory
Graphically illustrate the impact of an open-market purchase by the Federal Reserve on the
equilibrium interest rate using the theory of liquidity
ECON 3560/5040
Homework #3 (Answers)
Last Name:
,
First Name:
Part A (9 points) Fill-in Questions
(1) [3 points] The steady state with the highest consumption is called the
Golden Rule level of capital
(2) [3 points] The number of eective workers takes in
ECON 3560/5040
Homework #2 (Answers)
Last Name:
,
First Name:
(1) [8 points] Eects of Fiscal Policy in the Long Run
Soon after his election in 1992, President Clinton proposed to reduce government spending
and increase taxes
(a) [2 points] What eect would
ECON 3560/5040
Homework #1 (Answers)
Last Name:
,
First Name:
Part A (15 points) Fill-in Questions
(1) [3 points] Macroeconomics is the study of the economy as a whole. It focuses on issues such
as Economic Growth , Ination , and Unemployment
(2) [3 point
Intermediate Macroeconomic Theory /
Macroeconomic Analysis
(ECON 3560/5040)
Final Exam (Answers)
Part A (15 points)
State whether you think each of the following questions is true (T), false (F), or uncertain (U)
and briey explain your answer. No credit w
Staggering of Prices
1) Synchronized Price Setting
Every firm adjusts its price on the first day of every month
May 10
May 1
boom
June 1
AD
2) Staggered Price Setting
Half the firms set prices on the first day of each month and half on the
fifteenth
May