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  1. 1. MACROECONOMICSTutorial Hours: Monday 2pm & Wednesday 10am
  2. 2. WHO WAS MILTON FRIEDMAN? Republican/Conservative darling But he was a conservative out of expedience “You‟re right, we did it. We‟re very sorry. But thanks to you, we won‟t do it again.” Ben Bernanke (current Fed chairman) on the Great Depression Virulently campaigned AGAINST the prohibition of drugs… not your average „conservative‟ He considered his role in the abolition of the draft to be his finest achievement
  3. 3. FRIEDMAN & THE DRAFT Mr. Westmoreland: “I do not want to command an army of mercenaries.” Mr. Friedman interrupted: "General, would you rather command an army of slaves?" Mr. Westmoreland: "I dont like to hear our patriotic draftees referred to as slaves." Mr. Friedman: "I dont like to hear our patriotic volunteers referred to as mercenaries. If they are mercenaries, then I, sir, am a mercenary professor, and you, sir, are a mercenary general; we are served by mercenary physicians, we use a mercenary lawyer, and we get our meat from a mercenary butcher."
  4. 4. BASIC STUFF Use cover sheets, fill them out properly Use a computer (as much as you can), use a dark pen for other writing You guarantee zero if you don‟t answer. At least explain why you‟re not answering, unless your explanation is that you couldn‟t be bothered If you‟re not sure what the question is asking, explain what interpretation/reservations Explaining your thought process will turn a 2:1 into a 1st and a fail into a pass… CONVEY UNDERSTANDING
  5. 5. Q1) The answer is in your booklet (pg 11). Rewrite it. Make sure you define/explain EVERY term („real‟, „income‟) etc Use Nigel‟s notation/definitions for as much as possible. If he isn‟t marking your exam, one of us will be and we‟ll be using his notation Introduce notation like this:…income, Y, after deducting transfer payments, T. or …income (Y) after deducting transfer payments (T).
  6. 6. Q2) Patronize me, I won‟t be offended If you‟re using a formula for the first time, write it down... (in your answer, not now) APC = C/(Y-T) Then write each line of your working Then make clear your answer is your answer Don‟t assume I will fill in the gaps, spell it out for me. Show me every step you took, like a really boring person telling a story
  7. 7. Q3) A PICTURE TELLS 1000 WORDS A picture tells a thousand words I‟d definitely rather look at a picture than read a thousand words on a Friday afternoon Label axes, levels… CA , CB Keep referring to the diagram in your answer
  8. 8. KEY POINTS Keynes: MPC the same for A and B, time does not matter. I see money, I spend money Friedman: Key differences? SR v LR… hence we observe a pivot effect Smooth C, sure, but within limits. A on a higher SR C function MPC probably lowerfor B… why? Which do we think is more plausible, K or F?
  9. 9. 4) Again, define what you think the question means e.g. what does „determine‟ mean? More diagrams please, tables too Give yourself enough time to find the data, make sure you source it Think about which data are the most descriptive Start taking this seriously. The ability to present your work in a coherent and professional manner is what employers are looking for, regardless of the industry… and it takes practice.