EC2102 Macroeconomic Analysis I Tutorial 7, Week 11, March 28-April 1, 2011
Question 1
(a) y and x are positively correlated. See .gure 1 (b) y is a lagging variable w.r.t. x. See .gure 2 (c) x and y exhibit persistence.
Question 2
Depending on exactly ho
EC2102 Macroeconomic Analysis I Tutorial 1, Week 3 (January 24-28, 2011)
Question 1 Consider an economy which consists of only two individuals, Mr A and Mr B. They each live for 2 periods only; they are both young in period 1 and old in period 2, and they
NATIONAL UNIVERSITY OF SINGAPORE
Department of Economics
EC2102 Macroeconomic Analysis I
Instructor: Ho Kong Weng
Tutorial 4
Question 1
We will explore further the two-sector model presented in lecture and in the textbook.
(a) Assume that the production f
1
NATIONAL UNIVERSITY OF SINGAPORE
Department of Economics
EC2102 Macroeconomic Analysis I
Instructor: Ho Kong Weng
Tutorial 2
Suggested answer to Question 1:
(a) If output Y grows at rate g, then real money balances (M/P)d must also grow at rate g,
given
NATIONAL UNIVERSITY OF SINGAPORE
Department of Economics
EC2102 Macroeconomic Analysis I
Instructor: Ho Kong Weng
Tutorial 3
Question 1
Suggested answer to 1(a):
We assume that the 1,000 units of capital and the 1,000 units of labor are supplied
inelastic
1
NATIONAL UNIVERSITY OF SINGAPORE
Department of Economics
EC2102 Macroeconomic Analysis I
Instructor: Ho Kong Weng
Tutorial 1
Suggested answer to Question 1:
(a) The marginal product of labor MPL is found by partially differentiating the production
funct
NATIONAL UNIVERSITY OF SINGAPORE
Department of Economics
EC2102 Macroeconomic Analysis I
Instructor: Ho Kong Weng
Tutorial 6
Suppose consumption is given by:
C(Y T) = a + b(Y T),
where a > 0, and 0 < b < 1. Suppose investment is given by:
I(r) = c dr,
whe
NATIONAL UNIVERSITY OF SINGAPORE
Department of Economics
EC2102 Macroeconomic Analysis I
Instructor: Ho Kong Weng
Tutorial 5
Question 1
Suggested answer to 1(a):
An exogenous decrease in the velocity of money causes the aggregate demand curve to
shift dow
1
NATIONAL UNIVERSITY OF SINGAPORE
Department of Economics
EC2102 Macroeconomic Analysis I
Instructor: Ho Kong Weng
Tutorial 4
Question 1
Suggested answer to 1(a):
In the two-sector endogenous growth model in the text, the production function for
manufact
NATIONAL UNIVERSITY OF SINGAPORE
Department of Economics
EC2102 Macroeconomic Analysis I
Instructor: Ho Kong Weng
Tutorial 8
Question 1
For exam purposes, memorize the following DAD, DAS, and MPR (Monetary Policy Rule)
equations:
DAD equation:
Yt = Y A( t
NATIONAL UNIVERSITY OF SINGAPORE
Department of Economics
EC2102 Macroeconomic Analysis I
Instructor: Ho Kong Weng
Tutorial 5
Question 1
We will now examine how the goals of the Fed may influence its response to shocks in the
economy using the AD-AS model
NATIONAL UNIVERSITY OF SINGAPORE
Department of Economics
EC2102 Macroeconomic Analysis I
Instructor: Ho Kong Weng
Tutorial 7
Question 1
Explain the two theories of aggregate supply. On what market imperfection does each
theory rely? What do the theories h
NATIONAL UNIVERSITY OF SINGAPORE
Department of Economics
EC2102 Macroeconomic Analysis I
Instructor: Ho Kong Weng
Tutorial 10
Question 1
According to the Ricardian view of government debt, how does a debt-financed tax cut
affect public saving, private sav
NATIONAL UNIVERSITY OF SINGAPORE
Department of Economics
EC2102 Macroeconomic Analysis I
Instructor: Ho Kong Weng
Tutorial 7
Suggested answer to Question 1:
It was given in advance.
Suggested answer to Question 2:
(a) The natural rate of unemployment is t
NATIONAL UNIVERSITY OF SINGAPORE
Department of Economics
EC2102 Macroeconomic Analysis I
Instructor: Ho Kong Weng
Tutorial 9
Question 1
Assume the following Phillips curve:
u = u n ( E ) .
Suppose the Democratic Party always follows a policy of high money
NATIONAL UNIVERSITY OF SINGAPORE
Department of Economics
EC2102 Macroeconomic Analysis I
Instructor: Ho Kong Weng
Tutorial 10
Suggested answer to Question 1:
According to the Ricardian view, a debt-financed tax cut does not stimulate consumption
because i
NATIONAL UNIVERSITY OF SINGAPORE
Department of Economics
EC2102 Macroeconomic Analysis I
Instructor: Ho Kong Weng
Tutorial 8
Suggested answer to Question 1:
DAD equation:
Yt = Y A( t t* ) + B t ,
where A =
1
> 0.
> 0, B =
1 + Y
1 + Y
DAS equation:
t =
NATIONAL UNIVERSITY OF SINGAPORE
Department of Economics
EC2102 Macroeconomic Analysis I
Instructor: Ho Kong Weng
Tutorial 6
Suggested answer:
(a) The goods market is in equilibrium when output is equal to planned expenditure, or Y
= PE. Starting with thi
NATIONAL UNIVERSITY OF SINGAPORE
Department of Economics
EC2102 Macroeconomic Analysis I
Instructor: Ho Kong Weng
Tutorial 3
Question 1
Consider the following aggregate production function for an economy:
1
3
2
3
Y =K L .
Assume 1000 units of capital and
NATIONAL UNIVERSITY OF SINGAPORE
Department of Economics
EC2102 Macroeconomic Analysis I
Instructor: Ho Kong Weng
Tutorial 1
Question 1
= 3 3 3 ,
where K is capital (number of machines), L is labor (number of workers), and H is human
capital (number of u
Suggested Solutions to EC2102 Macroeconomic Analysis I Tutorial 1, Week 3 (January 24-28, 2011)
Question 1 (i) Let us set up the maximization problem for Mr. j, dropping the superscript j for now. Mr. j wants to max u(c1 ) + u (c2 )
c1 ;c2
y2 c2 = y1 + s:
EC2102 Macroeconomic Analysis I Tutorial 2, Week 5 (February 7-11, 2011)
Question 1 (This is a continuation of Question 1 of Tutorial 1) (v) What is the equilibrium real rate of interest at which the credit market clears? Express your solution as a functi
Suggested Solutions to EC2102 Macroeconomic Analysis I Tutorial 2, Week 5 (February 7-11, 2011)
Question 1 (This is a continuation of Question 1 of Tutorial 1) (v) We know that at the equilibrium real interest rate of r , sA (r ) + sB (r ) = 0: 1 1 Substi
EC2102 Macroeconomic Analysis I Tutorial 3, Week 6 (February 14-18, 2011)
Question 1 Consider an economy with a two-period lived representative agent. This agent has h units of time each period, which can be either spent working or on leisure, and this ag
Suggested Solutions to EC2102 Macroeconomic Analysis I Tutorial 3, Week 6 (February 14-18, 2011)
Question 1 (i) First period budget constraint is: C1 + S1 = w1 (h Second period budget constraint is: C2 = w2 (h l2 ) + (1 + r) S1 l1 ) :
Combining the two pe
EC2102 Macroeconomic Analysis I Tutorial 4, Week 8 (March 7-11, 2011)
Suppose we have an in.nitely-lived representative .rm which has a production techa nology of Yt = zt F (Kt ; Nt ) = zt Kt Nt1 a
, a > 0, t = 1; 2; : This .rm is owned by an
in.nitely li
Suggested Solutions to EC2102 Macroeconomic Analysis I Tutorial 4, Week 8 (March 7-11, 2011)
(i) Since the production technology is Yt = zt F (Kt ; Nt ) = zt Kta Nt1 a (0 < a < 1), the marginal product of capital in time period t, M P Kt : M P Kt = @Yt =@
EC2102 Macroeconomic Analysis I Tutorial 5, Week 9, March 14-18, 2011
Time goes on forever. An economy consists of an in.nitely-lived individual who values consumption and leisure, and has h units of time each period; an in.nitely lived representative .rm
EC2102 Macroeconomic Analysis I Tutorial 6, Week 10, March 21-25, 2011
Question 1 Let us consider the monetary intertemporal model studied in class. Suppose that the economy is initially in an equilibrium. Equilibria in the labour, goods, and money market
Suggested Solutions to EC2102 Macroeconomic Analysis I Tutorial 6, Week 10, March 21-25, 2011
Question 1 In the goods market, an expected increase in z2 means higher M P K2 , so higher return to investment, so I1 increases e investment component of Y1d %;