Econ 202 (Winter 2010): review notes on credit frictions
Carl Walsh March 6, 2010
1
1.1
Credit frictions
The market for lemons
Akerlof showed how markets can fail if problems of asymmetric information become too severe.
Example of used car market Assume t
Macroeconomics, Econ 202, Review Questions Winter 2010 1. Consider the basic short-run model of the textbook: ~ Yt =
t
b (Rt
r) : IS curve
=
t1
~ + v Yt : Phillips curve
t
Rt = r + m (
) : Monetary policy
~ Suppose the economy is initially at a full-emplo
Econ 202, Winter 2010 Problem set 2 Due: Tuesday January 26 1. The basic short run model of the text book takes the form ~ Yt = a Rt
t
b (Rt
t
r) )
r = m( =
t
~ 1 + v Yt
(a) Brie explain in words what each equation represents. y (b) Derive the aggregate d
Macroeconomics, Econ 202, Midterm Answers Instructions. Answer all four questions. 1. Answer all parts of this question. (a) Suppose data on output and prices are available for years 1 and 2. Using year 1 prices, GDP is 100 in year 1 and 105 in year 2, a
Econ 202 (Winter 2010): review
Carl Walsh February 3, 2010
These notes are designed to brie summarize the main topics we have covy ered in 202.
0.1
Overview of course and Measuring business cycles
1. What is a business cycle? (a) The term business cycle o
Econ 202 (Winter 2010): review
January 26, 2010
These notes are designed to brie summarize the main topics we have covy ered in 202.
0.1
Overview of course and Measuring business cycles
1. What is a business cycle? (a) The term business cycle or economic
Econ 202, Winter 2010 Problem set 4. Due: Thursday March 4. 1. The basic short run model of the text book takes the form ~ Yt =
t
b (Rt
t1
r)
=
~ + v Yt
plus a policy rule that species the behavior of Rt . Suppose, however, s that the central bank policy
Econ 202, Winter 2010 Problem set 4: Answers. 1. The basic short run model of the text book takes the form Yt = (Rt r) b t = t1 + v Yt plus a policy rule that species the behavior of Rt . Suppose, however, s that the central banks policy rate Rt is relate
Econ 202, Winter 2010 Problem set 3: Answers. 1. See answers to question 3 of the midterm. Using the basic short-run model of the text, what is the eect of a permanent increase in government spending on the output gap and in ation? (a) Assume the central
Econ 202, Winter 2010 Problem set 3. Due: Tuesday February 18. 1. Using the basic short-run model of the text, what is the eect of a permanent increase in government spending on the output gap and in ation? (a) Assume the central bank does not change its
Macroeconomics, Econ 202, Final Exam March 18, 2009 Instructions. Do both parts. PART I. . Answer both questions in this part. 1. The basic short run model of the text book takes the form ~ Yt = a
t
b (Rt
t1
r)
=
~ + v Yt
plus a policy rule that species t
Macroeconomics, Econ 202, Review Questions Winter 2010 1. Consider the basic short-run model of the textbook: ~ Yt =
t
b (Rt
r) : IS curve
=
t1
~ + v Yt : Phillips curve
t
Rt = r + m (
) : Monetary policy
~ Suppose the economy is initially at a full-emplo
Macroeconomics, Econ 202, Midterm: Answers February 12, 2009 Instructions. Answer all 4 questions. 1. Suppose data on output and prices are available for years 1 and 2. Using year 1 prices, GDP is 100 in year 1 and 110 in year 2, a 10% increase. Suppose u