Macroeconomic Theory and Policy: A Mathematical Approach
ECMB 06

Winter 2012
NAME
STUDENT #
UNIVERSITY OF TORONTO AT SCARBOROUGH
ECM B06
MACROECONOMICS
Jack Parkinson
Summer 2008
MIDTERM EXAMINATION SOLUTIONS: Version #1
INSTRUCTIONS:
Note: Ver #1 has a regular
1.#Total time for this test is 1.5 hours.
1 here!
2. Total marks = 90.
Macroeconomic Theory and Policy: A Mathematical Approach
ECMB 06

Spring 2016
ECMB06: Course Overview
Text:
Macroeconomics: Canadian Edition (4th or
3rd edition) By Mankiw & Scarth
Strengths: Well written, not too technical, math is
not too hard, short manageable chapters, good
ordering of material (LR and very LR dealt with
befo
Macroeconomic Theory and Policy: A Mathematical Approach
ECMB 06

Spring 2016
ECMB06: Dynamics in the Very Longrun
A simple explanation for motivation
Ch3
 LR model & static equilibrium
Inputs & technology determine LR output
& 8  LR & very LR model dynamics
Inputs & technology determine LR & very LR output
Changes in inputs
Macroeconomic Theory and Policy: A Mathematical Approach
ECMB 06

Spring 2016
Ch 10  SOLUTIONS to Supplemental Notes and Exercises #1
1)
Keynesian Cross & the Construction of the IS Curve
a)
Suppose C0 = 100, C1 = 0.6, I0 = 500, I1 = 50, and T0 = G0 = 500. What is the planned
expenditure function? If r = 4 (percent) what is the re
Macroeconomic Theory and Policy: A Mathematical Approach
ECMB 06

Spring 2016
Money, Prices & Inflation in the LR
(Ch4)
ECMB06 Summer 2012
Money
Refers to all assets, generally with a high degree of
liquidity, that can easily be used to settle transactions.
Three Main Functions of Money
1) Store of Value  provides a way to transfe
Macroeconomic Theory and Policy: A Mathematical Approach
ECMB 06

Spring 2016
Unemployment in the LR  (Ch6)
ECMB06 Summer 2012
Key Labour Market Definitions
Working Age Population (WAP) is the entire population
between the ages of 15 and death.
Canadian labour force statistics cover the entire
population 15 years old and up. So
Macroeconomic Theory and Policy: A Mathematical Approach
ECMB 06

Spring 2016
Review of IS/LM Model (Chapters 10 & 11)
IS Curve
LM Curve
Ceteris paribus, the Investment Saving or IS
Curve shows all of the (Y,r) pairs that
support (lead to) equilibrium in the Goods and
Services market.
( i.e. YS = YD ] S = I )
Ceteris paribus, the L
Macroeconomic Theory and Policy: A Mathematical Approach
ECMB 06

Spring 2016
Review of AD/AS Model (Chapter 9)
Aggregate Demand Curve (AD Curve)  Shows the relationship between the aggregate
(nominal) price level and real aggregate output (GDP) demanded. The quantity equation, money
market equilibrium, can be employed to show the
Macroeconomic Theory and Policy: A Mathematical Approach
ECMB 06

Spring 2016
Ch 10  Supplemental Notes and Exercises #1
1)
The Keynesian Cross  A simple model of SR income determination. Keynes postulated
that in the SR an economys aggregate (real) income was determined largely by the desire
to spend by households, firms, and th
Macroeconomic Theory and Policy: A Mathematical Approach
ECMB 06

Spring 2016
ECM B06  FINAL Exam
Recommendations
2.5 hours in length 
Monday, August 13th (7
pm) in IC130
Office Hours (in IC284)
TBA
Same style as past exams: All shortanswer questions
Covers chapters 2 through 12 (Eleven chapters). The
majority of the exam will
Macroeconomic Theory and Policy: A Mathematical Approach
ECMB 06

Spring 2016
Purchasing Power Parity (PPP) Measuring Variables
Absolute PPP
This theory says (predicts) the real exchange rate is equal to one (unity or parity) in the longrun.
So
e P
1
Pf
Where = the real exchange rate
= # of units of foreign real GDP you can
Macroeconomic Theory and Policy: A Mathematical Approach
ECMB 06

Winter 2012
NAME
STUDENT #
UNIVERSITY OF TORONTO AT SCARBOROUGH
ECM B06
MACROECONOMICS
Jack Parkinson
Spring 2009
MIDTERM EXAMINATION: SOLUTIONS VERSION #1
Note: Ver #1 has the word INSTRUCTIONS here!
INSTRUCTIONS:
1. Total time for this test is 1.5 hours.
2. Total m
Macroeconomic Theory and Policy: A Mathematical Approach
ECMB 06

Winter 2012
NAME
STUDENT #
UNIVERSITY OF TORONTO AT SCARBOROUGH
ECM B06
MACROECONOMICS
Jack Parkinson
Spring 2009
MIDTERM EXAMINATION: SOLUTIONS VERSION #2
Note: Ver #2 has the underlined word INSTRUCTIONS here!
INSTRUCTIONS:
1. Total time for this test is 1.5 hours.
Macroeconomic Theory and Policy: A Mathematical Approach
ECMB 06

Winter 2012
ECMB06 LEC 01, 02, 03 & 04
Macroeconomic Theory and Policy
Assignment 1
Due: On or before Friday, February 6, 2009, Lecture (No Later than 12:30pm)
(Note: Assignments submitted after 12:30pm on February 6 th WILL NOT BE
accepted under ANY circumstance.)
I
Macroeconomic Theory and Policy: A Mathematical Approach
ECMB 06

Winter 2012
ECMB06 All lectures
Macroeconomic Theory and Policy: A Mathematical Approach
Assignment 1
Due: (On or before) Friday, October 16, 2009, 12:30 pm
Room:
MW 380 (Professor Parkinsons office)
Note: Assignments submitted after 12:30 pm on Oct 16th WILL NOT BE
Macroeconomic Theory and Policy: A Mathematical Approach
ECMB 06

Winter 2012
1
NAME
STUDENT #
UNIVERSITY OF TORONTO AT SCARBOROUGH
ECM B06
MACROECONOMICS
Jack Parkinson
FALL 2009
MIDTERM EXAM  SOLUTIONS
INSTRUCTIONS:
1. Total time for this test is 2 hours.
2. Total marks = 100.
3. ALL exam documents MUST be handed in or you will