1
Economics 210
Prof. Michelle Connolly
Fall 2014
Problem Set VI Solution
Problem 1 (10 points)
a) Assume the following numbers are given to us: current price level, Pt=1 and future price level
Pt+1=1.2. Calculate the inflation rate t.
Solution(3 points):
Week 5 Answer Key
Econ 210D
K.D. Hoover
Spring 2015
Week 5 Answer Key
Problem 7.1:
a) Clorox and P&G are users of funds and the Public is the source of funds in both markets.
When Clorox buy back some of its bonds, fewer bonds are available at each intere
Economics 210
Prof. Michelle Connolly
Fall 2014
Problem Set X Solutions
Problem 1 Government Consumption and Public Services
a. Consider a temporary increase in government spending financed by lump sum taxes. Assume
that government spending does not contr
Economics 210
Prof. Michelle Connolly
Fall 2014
Problem Set IV
September 23, 2014
Problem 1 (12 pts)
Use the ASAD graph to answer the following:
a) Suppose that suddenly everyone in the economy becomes less patient; they now value current
consumption mor
Economics 210
Prof. Michelle Connolly
Fall 2014
Problem Set II Solutions (100 pts)
Problem 1 (26 pts)
The production function for a closed economy can be expressed by Y = 3L0.75 and the utility function is
defined by U = H2/3 C1/3, where H stands for leis
Economics110D
Fall2009
ProfessorK.D.Hoover
FinalAnswerKey
1.
Y
F[L1,K0]
Y0
(2)
F[L1,K1]
Y1
Y2
Y
F[L0,K]
Y0
(4)
F[L1,K]
Y1
Y2
(1)
L1
L
L0
K1
K0
K
(W/P)
s
L
(3)
(w/p)0
(w/p)1
D
L1
L
L0
D
L
L
AfallinK(arrow1ongraph)isinitiallyamovementalongthecapitalcurveoft
Adding Shading for NBER Recession Dates for Graphs.
The Excel hints for adding shading for NBER recession dates to graphs are for earlier versions of
Excel than many students have. The main idea of how to do it, remains the same. However, the
details diff
Week 3 Answer Key
Econ 210D
K.D. Hoover
Spring 2015
Corrected, 4 February 2015
Week 3 Answer Key
Problem 2.16: Using the postWorld War II data and the rule of thumb, the recessions in the
U.S. economy are as follows:
1948:41949:2, 1953:21954:1, 1957:3
Week 2 Answer Key
Econ 210D
K.D. Hoover
Spring 2015
Week 2 Answer Key
Problem 2.2:
Table 1. New Zealand National Income and Product Accounts
1996
GDP
Consumption
Savings
Investment
Government
Spending on Goods
and Services
Exports
Imports
Government Budge
Week 4 Answer Key
Econ 210D
K.D. Hoover
Spring 2015
Week 4 Answer Key
Problem 6.1:
a) A loan from your credit union:
Assets
Your Taccount
Liabilities and Net Worth
+$12,000
(car)
+$12,000
(loan debt to credit union)
b) A check written on your account:
As
Economics 210
Prof. Michelle Connolly
Duke University
Fall 2016
Problem Set 2 Solutions
Problem 1 (21 points)
Suppose you only live two periods and there is a credit market in place, allowing you to buy or
sell bonds between both periods. At the start of
Econ110D
Fall2009
K.D.Hoover
Problem1
Y
Midterm2
(A)LaborProductionFunction
Y
(B)CapitalProductionFunction
MPK
MPL
Y
0
Y
1
F(L0 ,K)
F(L1,K)
F(L, K0 )
w
p
L
L
L0
1
(C)Labordemandandlaborsupply
LS1
w
p
1
LS0
w
p
0
LD
L
1
L0
L
K
K0
Econ110D
Midterm2
Week 1 Answer Key
Econ 210D
K.D. Hoover
Spring 2015
Week 1 Answer Key
Problem 1.7.
Presidential Terms Ranked by Improvements in the Misery Index
President
(ranked best to
worst)
Term
First
Month
Last
Month
Inflation Rate
First
Month
Last
Month
Unemploymen
Economics 210
Prof. Michelle Connolly
Fall 2014
Problem Set VIII Solutions
Problem 1 The Small Open Economy in the Neoclassical Model (35 points)
Suppose we are in a small open economy which is currently experiencing a balanced current account
(CA). Assum
Economics 210
Prof. Michelle Connolly
Fall 2014
Problem Set IX
Problem 1 Exchange Rates, and Purchasing Power Parity (23 points)
a. Express the real exchange rate in terms of the terms of trade.
Solution (6 pts): The real exchange rate corresponds to the
Duke
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Economics 210
Prof. Michelle Connolly
Fall 2014
Problem Set VII Solutions
Problem 1 Investment and the Real Interest Rate (18 points)
a. Explain how investment is determined by the real interest rate.
Solution(10 pts): Investment depends positively on the
Economics 210
Prof. Michelle Connolly
Fall 2014
Problem Set III Solutions
Problem 1 (16 pts)
Suppose you only live two periods and there is a credit market in place, allowing you to buy or
sell bonds between both periods. At the start of your analysis, be
Economics 210
Prof. Michelle Connolly
Fall 2014
Problem Set V Solutions
September 30, 2014
Problem 1 The Intuition Behind the Basic Market Clearing Model (12 pts)
a) Explain how the aggregate supply is determined by the real interest rate. What other
dete
In signing the following, I am pledging to uphold the Duke University honor code.
Signature: _
Name:
_
Duke University
Department of Economics
Professor Michelle Connolly
2016
Econ 210D: Intermediate Macroeconomics
Midterm
Make sure to use a different exa

Wartime context: limitations on the use of the world credit market
o Loan market is helpful if only combatants have noncombatants to borrow from
o World War: no noncombatants to borrow from
 Borrowing from abroad is a way for country to smooth out its
ECON 390.02 Spring 2014 Midterm 1
February 10, 2014
NAME:
Directions
Please answer all questions in the space provided. Feel free to use the backs of
pages and the extra sheet attached after each problem. If you need additional
sheets of paper, ask me. Wr
Duke University
Department of Economics
Professor Michelle Connolly
Spring 2016
Econ 210D: Intermediate Macroeconomics
Final Exam
Make sure to use a different exam book for parts I, II, and III.
The exam has a total of 100 points.
Part I. Write Part I and
In signing the following, I am pledging to uphold the Duke University honor code.
Signature: _
Name:
_
Duke University
Department of Economics
Professor Michelle Connolly
Fall 2014
Econ 210D: Intermediate Macroeconomics
Midterm
Make sure to use a differen
Duke University
Department of Economics
Professor Michelle Connolly
Spring 2016
Econ 210D: Intermediate Macroeconomics
Final Exam
Make sure to use a different exam book for parts I, II, and III.
The exam has a total of 100 points.
Part I. Write Part I and
Economics 210
Prof. Michelle Connolly
Duke University
Spring 2016
Problem Set III Solutions
Problem 1 (22 points)
Use the YSYD graph to answer the following:
a) Suppose that suddenly everyone in the economy becomes less patient; they now value current
co
Economics 210
Prof. Michelle Connolly
Spring 2016
Problem Set 1 Solutions
Problem 1
Consider the following scenarios and identify whether they describe rulebased or discretionary
policy. In each case discuss how a rational agent would react to the policy