http://www.gmu.edu/departments/economics/bcaplan

Econ 816

Spring, 2000

**HW#1**

** **

**Part 1: Mathematical Problems**

1. Romer, problem 9.2.

2. Suppose
that _{}.

a. Apply the
formula _{} to this particular
utility function to get an equation for money demand as a function of _{}.

b. Take the
log of both sides of the resulting equation.
Derive an equation for (log) __nominal__ money holdings as a function
of everything else.

c. Does your final equation in (b) make sense?

**Part 2: Analytical Problems**

__TYPE__* succinct (1 page or less!)
answers to each of the following:*

1. White: chapter 1, #7

2. Is
involuntary unemployment a coherent concept?
Critique the arguments of __one__ of the following: Lucas,
Carmichael, Shapiro and Stiglitz, or Summers (from the week 1 readings).