Econ 716-31 Macroeconomics for Finance
Lau
Problem Set II
Spring 2010
Instructions:
1.
Answer all questions.
2.
Please form study group of up to 3 persons and work on the problem set.
3.
Show your formulas and steps clearly.
4.
Due date:
1/25/2010 (M) @8a
Econ 716_31 Macroeconomics for Finance
Lau
Problem Set III
Spring 2010
Instructions:
1.
Answer all questions. (4 pages long)
2.
Please form study group of up to 3 persons and work on the problem set.
3.
Show your formulas and steps clearly.
4.
Due: 2/1/20
Econ 716_31 Macroeconomics for Finance
Lau
Problem Set III
Spring 2010
Instructions:
1.
Answer all questions. (4 pages long)
2.
Please form study group of up to 3 persons and work on the problem set.
3.
Show your formulas and steps clearly.
4.
Due: 2/1/20
Econ 716 Macroeconomics for Finance
Lecture Notes
Professor Man-lui Lau
2
I.
Introduction to Macroeconomics
Definition:
GNP (Gross National Product) of a country is the total market value of all the final
goods and services produced by the resources owned
Econ 716
1.
2.
3.
Macroeconomics For Finance
Examination
Answer all questions.
Total points: 240
Total time allowed: 210 minutes
Lau
Fall 2009
Part I Multiple Choice: Circle the correct answer (110 points; 2 points each)
1.
The current prime rate in the U
Static LR Model
Loanable Funds Market
Mankiw, Chapter 3
Policy 1: Taxes and Saving
Tax policy may be used to affect saving.
Higher saving rate leads to higher GDP growth.
Consider tax policy that encourages saving.
Policy would shift supply of loanabl
LR Links of Real EXR to
Nominal EXR
LR Determinants of Nominal EXR
Relationship between nominal and real exchange rates.
= e [PH/PF] or e = [PF/PH]
where P = Domestic Price Level, etc.
Changes ()in nominal exchange rate:
%e = % + % PF - % PH
But % P
Open Economy Macroeconomics
Mankiw Chapter 6
International Flows
Interaction between economies involves:
Flows of capital, Net Capital Outflow, NCO.
Flows of goods and services, Net Exports, NX.
National income identities.
Real GDP = Y = Cd + Id + Gd
Circular Flow with
Models of Behavior
Mankiw, Chapter 3
Consumption
Recall from Circular Flow: Y = C+I+G+NX
Look at Closed Economy, i.e. NX=0
C
Consumptio
n
Function
Consumption, C
HHs determine their consumption based on
disposable income, Y-T where
Static LR Open
Economy Model &
Analysis
Small Open Economy Solution
The workings of a small open economy involve solving the 2 markets in proper
order.
Market for Loanable Funds
1. Draw market for loanable funds with S and I(r)
2. Set real interest rate
The Circular Flow,
Savings & Investment and
Long Run Model
Circular Flow
Our simplified economy consists of:
Three Groups of Economic Actors
Households: Provide labor, earn Income, buy consumption, pay taxes and save.
Firms: Hire labor, raise capital, p
Exchange Rates and
the Market for Foreign
Exchange
Small Open Economy
Rest of World
r*
Market for
S - I(r*) = NCO(r*)
Loanable Funds
Market for
Foreign Exchange
Real Exchange Rate,
NX()
2
Prices for Intl Transactions I
Nominal Exchange Rate, e.
Rate at
Money Rates - Markets Data Center - WSJ.com
http:/online.wsj.com/mdc/public/page/2_3020-moneyrate.html?mod=top.
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Econ 716-31 Macroeconomics for Finance
Lau
Problem Set V
Spring 2010
Instructions:
1.
Answer all questions. (2 pages long)
2.
Please form study group of up to 3 persons and work on the problem set.
3.
Show your formulas and steps clearly.
4.
Due date:
2/2
Econ 716-31 Macroeconomics for Finance
Instructor:
Spring 2010
Prof. Man-lui Lau (M 8am-noon) (no class on 2/15/2010)
Office:
Cowell 404
Phone #:
415-422-6730
Email:
laum@usfca.edu
Office Hours: WF 4-5:45pm; or by appointment
Course objectives:
The course
Econ 716-31 Macroeconomics for Finance
Lau
Problem Set V
Spring 2010
Instructions:
1.
Answer all questions. (2 pages long)
2.
Please form study group of up to 3 persons and work on the problem set.
3.
Show your formulas and steps clearly.
4.
Due date:
2/2
Econ 716-31 Macroeconomics for Finance
Lau
Problem Set IV
Spring 2010
Instructions:
1.
Answer all questions. (2 pages long)
2.
Please form study group of up to 3 persons and work on the problem set.
3.
Show your formulas and steps clearly.
Part I
Computat
Econ 716-31 Macroeconomics For Finance
Examination
1.
Answer all questions.
2.
Total points: 240
3.
Total time allowed: 210 minutes
Lau
Spring 2010
Part I Multiple Choice: Circle the correct answer (110 points; 2 points each)
1.
The current prime rate in
Econ 716-31 Macroeconomics for Finance
Lau
Problem Set IV
Spring 2010
Instructions:
1.
Answer all questions. (2 pages long)
2.
Please form study group of up to 3 persons and work on the problem set.
3.
Show your formulas and steps clearly.
Part I
Computat
Econ 716-31 Macroeconomics for Finance
Lau
Problem Set II
Spring 2010
Instructions:
1.
Answer all questions.
2.
Please form study group of up to 3 persons and work on the problem set.
3.
Show your formulas and steps clearly.
4.
Due date:
1/25/2010 (M) @8a
Econ 716-31 Macroeconomics for Finance
Lau
Problem Set I
Spring 2010
Instructions:
1.
Answer all questions.
2.
Please form study group of up to 3 persons and work on the problem set.
3.
Show your formulas and steps clearly.
4.
Due date:
1/18/2010 (M) @8am
Effectiveness of fiscal policy
r
LM1
LM2
r*
LM3
IS
IS
Y
Y2
Y*
LM curve vertical
LM curve horizontal
Y3
Money demand does not depend on interest rate
Money demand is extremely sensitive to income.
Money demand is extremely sensitive to interest rate
Money
30-Day Federal Funds
1 of 1
http:/www.cmegroup.com/trading/interest-rates/stir/30-day-federal-fund.
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Products & Trading Interest Rates 30-Day Federal Funds
Products
Commodity Products
Eco
Econ 716
1.
Suppose the population growth rate goes down, with the aid of a diagram, explain
how this event will affect
i)
the immediate level of k and y ,
ii)
the steady state level of k and y , and
ii)
the steady state growth rate of k and y .
Consider