Latest Questions & Answers

Q: Consider a consumer with a steady flow of real purchases of amount

Consider a consumer with a steady flow of real purchases of amount αY,0

Q: Consider an economy consisting of some firms with flexible prices and some

Consider an economy consisting of some firms with flexible prices and some with rigid prices. Let p f denote the price set by a representative flexible-price firm and pr the price set by a representat...

Q: Suppose that the money supply is determined by mt = czt−

Suppose that the money supply is determined by mt = czt−1 +et, where c and z are vectors and et is an i.i.d. disturbance uncorrelated with zt−1. et is unpredictable and unobservable. Thus the expected...

Q: Consider the problem facing an individual in the Lucas model when Pi

Consider the problem facing an individual in the Lucas model when Pi/P is unknown. The individual chooses Li to maximize the expectation of Ui; Ui continues to be given by equation (6.74). (a) Find th...

Q: Consider an island consisting of N people and many palm trees.

Consider an island consisting of N people and many palm trees. Each person is in one of two states, not carrying a coconut and looking for palm trees (state P) or carrying a coconut and looking for ot...

Q: Suppose production at firm i is given by Yi =SLα i

Suppose production at firm i is given by Yi =SLα i , where S is a supply shock and 0

Q: Consider an economy consisting of many imperfectly competitive, price setting firms

Consider an economy consisting of many imperfectly competitive, price setting firms. The profits of the representative firm, firm i, depend on aggregate output, y, and the firm’s real price, ri: πi =...

Q: Consider an economy consisting of many imperfectly competitive firms. The profits

Consider an economy consisting of many imperfectly competitive firms. The profits that a firm loses relative to what it obtains with pi =p∗ are K(pi − p∗)2, K >0. As usual, p∗=p+φy and y =m − p. Each...

Q: Consider the model in equations(6.29) (6

Consider the model in equations(6.29) (6.32).Suppose, however, that the Et[yt+1] term in (6.31) is multiplied by a coefficient ω,0

Q: Describe how, if at all, each of the following developments

Describe how, if at all, each of the following developments affects the curves. (a) The coefficient of relative risk aversion, θ, rises. (b) The curvature of (•),χ, falls. (c) We modify the utility fu...