Econ 105A Fall 2013
Discussion Session: Week 2 (Oct.2, 3)
TEXTBOOK: Ch.2 Questions and Problems #1.b,c,d,e,h
Ch.3 Questions and Problems #2, 3
1. Suppose the United States economy is represented by the following equations:
Z =C +I +G
C = 300 + 0.9YD
YD =
Econ 105A Fall 2013
Discussion Session 1: Week 2 (Oct.2, 3)
1. Suppose the United States economy is represented by the following equations:
Z =C +I +G
C = 300 + 0:9YD
YD = Y
G = 2000
T
T = 1000
I = 200
(a) Calculate the equilibrium level of output.
Y = 30
Econ 105A Nov 6, 7
Discussion 6
1. Suppose that the relationship between inflation rate () and unemployment rate () is
described by the following equation:
= ( + )
where = 0.1, = 0.05 and = 3. In this economy, the authorities keep unemployment rate
Econ 105A Dec 4, 5
Discussion 10
1. For each of the following events, assume that the goods market is initially in equilibrium
and that a trade surplus exists (N X > 0) at the initial level of output. Explain what
eect each event will have on the demand f
Econ 105A Nov 13, 14
Discussion 7
1. Given the production function and the depreciation rate ()
p p
Yt = 0.4 Kt N .
= 0.1.
(a) find the steady-state levels of K/N and Y /N (they will be a function of the saving
rate s);
(b) draw the steady-state C/N as a
Econ 105A Fall 2013
Discussion Session 2: Week 3 (Oct.9, 10)
TEXTBOOK: Ch.5 Questions and Problems #3
Chapter 4
1. Use the information provided below to answer the following questions:
R = 50
CU = 250
D = 500
(a) Calculate the reserve ratio.
(b) Calculate
Econ 105A Oct 23, 24
Discussion 4
1. Suppose the economy is initially operating at Yn . Now suppose G increases.
(a) Use the graph below to illustrate the initial equilibrium, dynamic adjustment, and
medium-run equilibrium. In your graph, illustrate the e
Econ 105A Nov 27, 28
Discussion 9
1. Suppose P and P are both increasing. Now suppose that the dollar experiences a 5%
nominal depreciation.
(a) Which country is experiencing the higher rate of inflation if the domestic currency
experiences a real appreci
Econ 105A Oct 16, 17
Discussion 3
1. For the following values of m, calculate the real wage.
(a) m = 0:1; 0:2; 0:3 and 0:4.
Simply plug the numbers into the equation W=P = 1=(1 + ): :91; :83; :77 and:71.
(b) What happens to the real wage as m increases?
I
Econ 105A Nov 20, 21
Discussion 7
1. Use the graph provided below to answer the following questions.
1. (a) Graphically illustrate the eects of a reduction in the saving rate.
(b) Explain what happens to K=N A and Y =N A over time.
(c) What are the long-r
Econ 105A Nov 20, 21
Discussion 7
1. Use the graph provided below to answer the following questions.
1. (a) Graphically illustrate the eects of a reduction in the saving rate.
(b) Explain what happens to K=N A and Y =N A over time.
The lower saving rate c
Econ 105A Fall 2013
Discussion Session 2: Week 3 (Oct.9, 10)
TEXTBOOK: Ch.5 Questions and Problems #3
Chapter 4
1. Use the information provided below to answer the following questions:
R = 50
CU = 250
D = 500
(a) Calculate the reserve ratio.
50=500 = :10
Econ 105A Nov 27, 28
Discussion 9
1. Suppose P and P are both increasing. Now suppose that the dollar experiences a 5%
nominal depreciation.
(a) Which country is experiencing the higher rate of ination if the domestic currency
experiences a real appreciat
Econ 105A Oct 16,17
Discussion 3
1. For the following values of m, calculate the real wage.
(a) m = 0:1; 0:2; 0:3 and 0:4.
(b) What happens to the real wage as m increases?
(c) Explain why the real wage changes as m increases.
2. Use the WS and PS relatio
Econ 105A Dec 4, 5
Discussion 10
1. For each of the following events, assume that the goods market is initially in equilibrium
and that a trade surplus exists (N X > 0) at the initial level of output. Explain what
eect each event will have on the demand f
Econ 105A Nov 13, 14
Discussion 7
1. Given the production function and the depreciation rate ( )
p p
Yt = 0:4 Kt N :
= 0:1:
(a) nd the steady-state levels of K=N and Y =N (they will be a function of the saving
rate s);
p p
p
p
Kt N
s 0:4 N
= K
K=N = 16s2
Econ105A, Dongwon Lee
Lecture 13: Ch.12 Technological Progress and Growth
One lesson from Ch.11; Capital accumulation cannot by itself sustain growth. Sustained
growth requires technological progress.
12.1 Technological Progress and the Rate of Growth
12.
Selected topics from
Chapter 9
Tasneem Raihan
[email protected]
Required background concepts
Asymmetric information problem: One party knows more than
the other party involved in a transaction.
Two types: (i) Moral hazard: The risk that one p
Midterm Examination (40 points, 50 minutes)
Don't write in cursive. Please, print your answers.
1. a. Foreign official holdings of U.S. Treasuries increased from $400 billion in January
1994 to about $3 trillion in June 2010. Most of this growth is accoun
Chapter 9
Financial Crises
http:/www.youtube.com/watch?v=qqUGoVez8xg
Bank Run
The Financial Crisis of 2007-2009
Causes of the housing boom
1. Financial innovations emerge in the mortgage markets
Mortgage-backed securities
Collateralized debt obligation
Econ105A, Dongwon Lee
Lecture 10: Ch.10 The Facts of Growth
Growth (steady increase in aggregate output Y over time) dominates the determination of
output in the long run.
10.1 Measuring the Standard of Living
U.S. GDP since 1890
1
Econ105A, Dongwon Lee
Econ105A, Dongwon Lee
Lecture 6 & 7: Ch.7 The AS-AD Model
The AS-AD model allows us to look at the determination of output in both the short run and
the medium run.
7.1 Aggregate Supply
The aggregate supply (AS) relation captures the effects of output on
Econ105A, Dongwon Lee
Lecture 15: Ch.19 The Goods Market in an Open Economy
Nowadays, a recession in one country can affect the economy of other countries through
spillover effects. This chapter introduces how the spillover effects in the goods market wor
Econ105A, Dongwon Lee
Lecture 9: Ch.9 The Crisis
What caused the global recession, how effective was the policy response, and what is the
outlook for the recovery?
9.1 From a Housing Problem to a Financial Crisis
After 2006, housing prices begin to decli
Econ105A, Dongwon Lee
Lecture 8: Ch.8 The Phillips Curve
The Phillips curve shows a negative relation between inflation and unemployment.
8.1 Inflation, Expected Inflation, and Unemployment
We introduce a linear function for F(u, z) = 1 + in the AS relat
Econ105A, Dongwon Lee
Lecture 4: Ch.5 The IS-LM Model
5.1 The Goods Market and the IS relation
In practice, investment depends primarily on two factors: Y and i. Firms increase investment
as there is an increase in sales (Y) and reduce investment as ther
Econ105A, Dongwon Lee
Lecture 3: Ch.4 Financial Markets
4.1 The Demand for Money
Suppose there are only two assets, money and bonds:
Money (= currency + checkable deposits) pays no interest;
Bonds pay a positive interest i.
The demand for money refers t
Econ105A, Dongwon Lee
Lecture 5: Ch.6 The Labor Market
6.0 Transition from the Short-Run to the Medium-Run
The price level P is fixed in the IS-LM model, which is thus called a short-run
macroeconomic model. We now move toward the medium run, at which in
Econ105A, Dongwon Lee
Lecture 14: Ch.18 Openness in Goods and Financial Markets
18.1 Openness in Goods Markets
18.1.1 Degree of Globalization
Growth in Different Countries since 2005
U.S. Exports and Imports since 1960
1
Econ105A, Dongwon Lee
When good