Lecture 2a
Systems of Linear Equations
(pages 63-64)
In Lecture 1s, we needed to nd a point on two planes. To do this, we needed
to nd a point (x1 , x2 , x3 ) that was a solution to two equations for planes. This
is one of many examples of a system of lin
Chapter 13
Exchange Rates, Business Cycles,
and Macroeconomic Policy in the
Open Economy
T Multiple Choice Questions
1.
The price of one currency in terms of another is called
(a) the exchange rate.
(b) purchasing power parity.
(c) the terms of trade.
(d)
Chapter 4
Consumption, Saving, and Investment
T Multiple Choice Questions
1.
Desired national saving equals
d
(a) Y C G.
d
d
(b) C + I + G.
d
(c) I + G.
d
(d) Y I G.
Answer: A
Level of difficulty: 1
Section: 4.1
2.
With no inflation and a nominal interest
Chapter 6
Long-Run Economic Growth
T Multiple Choice Questions
1.
Between 1870 and 1996, among the United States, Germany, Japan, and Australia, _ grew at
the fastest rate and _ grew at the slowest rate.
(a) the United States; Germany
(b) Germany; the Uni
Chapter 10
Classical Business Cycle Analysis:
Market-Clearing Macroeconomics
T Multiple Choice Questions
1.
Which of the following is not a primary cause of business cycle fluctuations, according to real
business cycle theory?
(a) A change in the producti
Department of Economics
University of Toronto
2013-2014
ECO 209Y1Y L5101
MACROECONOMIC THEORY
R 6:00-9:00pm
INSTRUCTOR: Dr. Reza Ghaeli
E-mail: reza.ghaeli@utoronto.ca
Tutorials & Office Hours: Thursdays 8 to 9 PM
COURSE DESCRIPTION
The course examines mo
Macroeconomics
Lecture 1 Slides
Dr. Reza Ghaeli
ECO209Y1Y L5101
Fall 2013
University of Toronto
Study of Macroeconomics
Economics is the study of the economy and the behavior of people in
the economy
Economics is divided into microeconomics and macroecono
Alternative Computation of Real GDP Growth
A country Producing Potato Chips and Computers
Year
2002
2003
2004
2005
Potato Chips (by Bag)
Number Produced Price ($)
10000
2
10200
2.1
10384
2.14
10560
2.24
Computers (by Unit)
Number Produced
Price ($)
1
1000
TheOpenEconomyandtheExchangeRateRegime
(TheMundellFlemingModel)
(Ref:Ch.12)
Lecture 10 Slides
Dr. Reza Ghaeli
ECO209Y1Y L5101
Fall 2013
University of Toronto
The Mundell-Fleming (MF) Model
Key assumption:
Small open economy with perfect capital
mobility
TheAssetMarket
Money,PricesandInflation
(Ref:Ch.4)
Lecture 5 Slides
Dr. Reza Ghaeli
ECO209Y1Y L5101
Fall 2013
University of Toronto
What is Money?
Money is the stock of liquid financial assets
that can be readily used to make
transactions
The money supp
CHAPTER
10
Introduction to Economic Fluctuations
Questions for Review
1. When GDP declines during a recession, growth in real consumption and investment
spending both decline; unemployment rises sharply.
2. The price of a magazine is an example of a price
Unemployment
(Ref:Ch.6)
Lecture 6 Slides
Dr. Reza Ghaeli
ECO209Y1Y L5101
Fall 2013
University of Toronto
Natural Rate of Unemployment
The long-run or the average rate of
unemployment
Sometimes referred to as structural and
frictional unemployment
In a
11
CHAPTER
Aggregate Demand I: Building the
IS LM Model
Questions for Review
1. The Keynesian-cross model tells us that fiscal policy has a multiplied effect on income.
The reason is that according to the consumption function, higher income causes higher
CHAPTER
6
The Open Economy
Questions for Review
1. By rewriting the national income accounts identity, we show in the text that
S I = NX.
This form of the national income accounts identity shows the relationship between the
international flow of funds for
CHAPTER
5
Inflation: Its Causes, Effects, and
Social Costs
Questions for Review
1. The quantity equation is an identity that expresses the link between the number of
transactions that people make and how much money they hold. We write it as
Money Velocity
CHAPTER
7
Unemployment
Questions for Review
1. The rates of job separation and job finding determine the natural rate of unemployment. The rate of job separation is the fraction of people who lose their job each month.
The higher the rate of job separatio
CHAPTER
4
The Monetary System: What It Is
and How It Works
Questions for Review
1. Money has three functions: it is a store of value, a unit of account, and a medium of
exchange. As a store of value, money provides a way to transfer purchasing power from
CHAPTER
8
Economic Growth I: Capital Accumulation
and Population Growth
Questions for Review
1. In the Solow growth model, a high saving rate leads to a large steady-state capital
stock and a high level of steady-state output. A low saving rate leads to a
Chapter 9
The IS-LM/AD-AS Model: A General
Framework for Macroeconomic Analysis
T Multiple Choice Questions
1.
The FE line shows the level of output at which the _ market is in equilibrium.
(a) Goods
(b) Asset
(c) Labor
(d) Money
Answer: C
Level of diffic
University of Toronto
ECO209Y1Y L5101
Test Three
Date: Feb. 14, 2013
Duration: 90 min
Professor: Dr. Reza Ghaeli
First Name_Last Name_Student Number_
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. (7
Test 3 Solution
Multiple Choice Questions:
1
2
3
4
5
6
7
8
9
10
D
B
B
D
C
D
A
D
A
A
11
12
13
14
15
16
17
18
19
20
B
D
B
D
D
D
D
A
C
A
21
22
23
24
25
26
27
28
29
30
D
B
C
A
D
C
A
D
B
C
31
32
33
34
35
B
A
C
C
C
Short Answer Questions:
36
(a) IS curve equati
Lecture 2c
Gaussian Elimination (pages 64-68)
Now that we have an idea of our goal, we need to gure out how to manipulate
our given equations in ways that will bring them closer to our goal, while not
actually changing the solution.
Denition: We say that
Lecture 2d
The Matrix Representation of a System of Linear Equations
(pages 69-73)
After you have spent a lot of time solving systems of equations using Gaussian
elimination with back-substitution (which, presumably by now you havent, but
I assure you tha
Lecture 2b
Back-Substitution
(pages 64-68)
The rst method we will use to solve a system of linear equations is known as
Gaussian elimination with back-substitution. The idea is that we are hoping for
a solution of the form
x1 = s1 , x2 = s2 , . . . , xn =
Lecture 2e
Row Echelon Form
(pages 73-74)
At the end of Lecture 2a I said that we would develop an algorithm for solving
a system of linear equations, and now that we have our matrix notation, we can
proceed with that plan. The rst thing we are going to d
Lecture 2f
Consistent? Unique?
(pages 75-76)
While nding the general solution to a system of linear equations is always nice,
sometimes all we really care about is whether or not there is a solution.
Denition: A system of linear equations that has at leas
Lecture 2g
Solving a System of Linear Equations
(Summarizing the results of Section 2.1)
So far, the process of solving a system of linear equations has been broken
into little pieces, so I thought that we should end our discussion of Section 2.1
by putti
Prof. Gustavo Indart
Department of Economics
University of Toronto
ECO209
MACROECONOMIC THEORY
Chapter 18
THE MONEY SUPPLY AND MONETARY POLICY
Discussion Questions:
1.
Open market operations are the main tool used by the Bank of Canada to change the
size
Prof. Gustavo Indart
Department of Economics
University of Toronto
ECO 209Y
MACROECONOMIC THEORY
Solution to Problem Set 1-2
(Odd numbers only)
1. a) GDP = C + I + G + (X Q)
= 273,081 + 91,744 + 112,986 + (137,459 132,879)
= 482,391.
b) NNP = GNP deprecia