Prof. Bryan Caplan

bcaplan@gmu.edu

http://www3.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).