Question Ten Nominal Rigidity Assume that the Bank of Zambi.pdf
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Question Ten: Nominal Rigidity Assume that the Bank of Zambia has the ability to control real interest rate. And suppose the economy is described by two equations. The IS equation given as Yt=rt/ while the money-market equilibrium condition: mp=L(r+e;Y). Where Lr+e< 0;LY>0;m and p denote logM and logP. a. Suppose prices respond partially to increases in money. Specifically, assume that dp= dm is exogenous, with 0<dp=dm<1. Also assume e=0. i. Find an expression for d r=dm. ii. Does an increase in the money supply lower the real interest rate? b. Suppose increases in money also affect expected inflation. Specifically, assume that de= dm is exogenous, with de=d m>0. Continue to assume 0<dp=dm<1. i. Find an expression for dr=dm. ii. Does an increase in the money supply lower the real interest rate? iii. Does achieving a given change in r require a change in m smaller, larger, or the same size as in part (a)? c. Consider Keynes's model of nominal rigidity where nominal wages are completely unresponsive to current developments, there is labour market imperfection, and firms are competitive with flexible prices. If there is an increase demand brought about by an increase in money stock, what would be the impact of this increase in demand on the real wage and output? You may use graphs to illustrate your answer. d. In your own words, explain the Lucas Critique and its implications for policy decisions based on statistical/econometric relationships..
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Advanced macroeconomics, 4th edition. Romer. Chapter12.12.1. T.docx
Advanced macroeconomics, 4th edition. Romer.
Chapter12.
12.1. The stability of fiscal policy. (Blinder and Solow, 1973.) By definition, the budget deficit equals the rate of change of the amount of debt outstanding: δ(t) ≡ D ̇(t). Define d(t) to be the ratio of debt to output: d(t) = D(t)/Y(t). Assume that Y(t) grows at a constant rate g > 0.
(a) Suppose that the deficit-to-output ratio is constant: δ(t)/Y(t) = a, where a > 0.
̇
(i) Find an expression for d(t) in terms of a, g, and d(t). ̇
(ii) Sketch d(t) as a function of d(t). Is this system stable?
(b) Suppose that the ratio of the primary deficit to output is constant and equal to a > 0. Thus the total deficit at t, δ(t), is given by δ(t) = aY(t) + r(t)D(t), where r(t) is the interest rate at t. Assume that r is an increasing function of the debt-to-output ratio: r(t) = r(d(t)), where r′(•) > 0, r′′(•) > 0, limd→−∞ r(d) < g, limd→∞ r(d) > g.
̇
(i) Find an expression for d(t) in terms of a, g, and d(t). ̇
(ii) Sketch d(t) as a function of d(t). In the case where a is sufficiently small that d ̇ is negative for some values of d, what are the stability properties of the system? What about the case where a is sufficiently large that d ̇ is positive for all values of d ?
12.2. Precautionary saving, non-lump-sum taxation, and Ricardian equivalence.
(Leland, 1968, and Barsky, Mankiw, and Zeldes, 1986.) Consider an individual who lives for two periods. The individual has no initial wealth and earns labor incomes of amounts Y1 and Y2 in the two periods. Y1 is known, but Y2 is random; assume for simplicity that E[Y2] = Y1. The government taxes income at rate τ1 in period 1 and τ2 in period 2. The individual can borrow and lend at a fixed interest rate, which for simplicity is assumed to be zero. Thus second-period consumption is C2 = (1 − τ1)Y1 − C1 + (1 − τ2)Y2. The individualchoosesC1 tomaximizeexpectedlifetimeutility,U(C1)+E[U(C2)].
(a) Find the first-order condition for C1.
(b) Show that E[C2] = C1 if Y2 is not random or if utility is quadratic.
(c) Show that if U ′′′(•) > 0 and Y2 is random, E[C2] > C1.
(d) Suppose that the government marginally lowers τ1 and raises τ2 by the same amount, so that its expected total revenue, τ1Y1 + τ2E[Y2], is un- changed. Implicitly differentiate the first-order condition in part (a) to find an expression for how C1 responds to this change.
(e) Show that C1 is unaffected by this change if Y2 is not random or if utility is quadratic.
(f) Show that C1 increases in response to this change if U ′′′(•) > 0 and Y2 is random.
12.3
Consider the Barro tax-smoothing model. Suppose that output, Y, and the real interest rate, r, are constant, and that the level of government debt out- standing at time 0 is zero. Suppose that there will be a temporary war from time 0 to time τ. Thus G(t) equals GH for 0 ≤ t ≤ τ, and equals GL there- after,whereGH >GL.Whatarethepathsoftaxes,T(t),andgovernmentdebt outstanding, D(t)?
12.4
Consider the Barro tax-smoothing model. Supp.
Econ 320 – Exam”Due Monday 46 at 1159pm Pacific timeN.docx
Econ 320 – “Exam”
Due Monday 4/6 at 11:59pm Pacific time
Name/section:
1 AS-AD
Consider the following AS-AD model. Please note that I have given you the AD curve explicitly
and simplified many of the expressions you saw in lecture and previous HW (i.e. no z, I already
solved for the relationship between unemployment and output, etc.).
Aggregate demand:
Y = 200 − 10P
Wage setting relationship:
w = P e(1 − u)
Price setting relationship:
P = 1.1w
Output and the unemployment rate:
u = 1 − Y
110
1. Derive the AS curve.
2. Solve for the medium run equilibrium output and price level.
3. Suppose P e = 30. Do you expect P e to rise or fall? Solve for the equilibrium price and
output level when P e = 30.
4. Suppose P e = 6. Do you expect P e to rise or fall? Solve for the equilibrium price and output
level when P e = 6.
2 European Competition Law
When new European Union member countries join the EU they become subject to the European
Union competition law – a law that regulates anticompetitive behavior and keeps markets within
Europe more competitive.
1. What effect will this have on the new member county’s natural rate of unemployment? Pro-
vide a graph supporting your answer.
2. What effects will joining the EU have on the new member’s prices and output? Provide a
graph to support your answer.
3. Do you expect higher or lower inflation after the country joins the EU? Explain your answer.
1
3 IS-LM and Excess Reserves
Consider the following IS-LM model with a banking system:
Consumption:
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Investment:
I = 0.4Y − 100i
Government expenditure:
G = 5
Taxes:
T = 10
Money demand:
Md
P
=
Y
i
In periods of financial turmoil, banks often choose to hold excess reserves above and beyond what
they are required to hold by law. We shall denote the proportion of deposits held as excess reserves
as ρ and the required reserve ratio as θ. Suppose that consumers hold 37.5% of their money as
currency (c = 0.375) and the required reserve ratio is 20% (θ = 0.2). The banking system is then
described by:
Demand for reserves:
Rd = 0.2Dd + ρDd
Demand for deposits:
Dd = (1 − 0.375)Md
Demand for currency:
CUd = 0.375Md
Demand for central bank money (Hd) is the total amount of currency being demanded plus the
total demand for reserves. Suppose the price level is P = 1.
1. Suppose that that banks do not wish to hold excess reserves (ρ = 0) and that the supply of
central bank money is H = 500. Solve for the money multiplier and the overall money supply.
Explain/show your work.
2. Solve for equilibrium output and the equilibrium interest rate when H = 500.
3. Suppose that banks start holding 815 of their deposits as excess reserves (ρ =
8
15). Solve for
the new equilibrium output when H = 500. HINT: Overall money will be a whole number –
don’t round when calculating the new money multiplier. Output and interest rates will not.
4. Provide an IS-LM graph that demonstrates what happens to the general equilibrium when
banks increase th.
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Chapter12.
12.1. The stability of fiscal policy. (Blinder and Solow, 1973.) By definition, the budget deficit equals the rate of change of the amount of debt outstanding: δ(t) ≡ D ̇(t). Define d(t) to be the ratio of debt to output: d(t) = D(t)/Y(t). Assume that Y(t) grows at a constant rate g > 0.
(a) Suppose that the deficit-to-output ratio is constant: δ(t)/Y(t) = a, where a > 0.
̇
(i) Find an expression for d(t) in terms of a, g, and d(t). ̇
(ii) Sketch d(t) as a function of d(t). Is this system stable?
(b) Suppose that the ratio of the primary deficit to output is constant and equal to a > 0. Thus the total deficit at t, δ(t), is given by δ(t) = aY(t) + r(t)D(t), where r(t) is the interest rate at t. Assume that r is an increasing function of the debt-to-output ratio: r(t) = r(d(t)), where r′(•) > 0, r′′(•) > 0, limd→−∞ r(d) < g, limd→∞ r(d) > g.
̇
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(ii) Sketch d(t) as a function of d(t). In the case where a is sufficiently small that d ̇ is negative for some values of d, what are the stability properties of the system? What about the case where a is sufficiently large that d ̇ is positive for all values of d ?
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(Leland, 1968, and Barsky, Mankiw, and Zeldes, 1986.) Consider an individual who lives for two periods. The individual has no initial wealth and earns labor incomes of amounts Y1 and Y2 in the two periods. Y1 is known, but Y2 is random; assume for simplicity that E[Y2] = Y1. The government taxes income at rate τ1 in period 1 and τ2 in period 2. The individual can borrow and lend at a fixed interest rate, which for simplicity is assumed to be zero. Thus second-period consumption is C2 = (1 − τ1)Y1 − C1 + (1 − τ2)Y2. The individualchoosesC1 tomaximizeexpectedlifetimeutility,U(C1)+E[U(C2)].
(a) Find the first-order condition for C1.
(b) Show that E[C2] = C1 if Y2 is not random or if utility is quadratic.
(c) Show that if U ′′′(•) > 0 and Y2 is random, E[C2] > C1.
(d) Suppose that the government marginally lowers τ1 and raises τ2 by the same amount, so that its expected total revenue, τ1Y1 + τ2E[Y2], is un- changed. Implicitly differentiate the first-order condition in part (a) to find an expression for how C1 responds to this change.
(e) Show that C1 is unaffected by this change if Y2 is not random or if utility is quadratic.
(f) Show that C1 increases in response to this change if U ′′′(•) > 0 and Y2 is random.
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Consider the Barro tax-smoothing model. Suppose that output, Y, and the real interest rate, r, are constant, and that the level of government debt out- standing at time 0 is zero. Suppose that there will be a temporary war from time 0 to time τ. Thus G(t) equals GH for 0 ≤ t ≤ τ, and equals GL there- after,whereGH >GL.Whatarethepathsoftaxes,T(t),andgovernmentdebt outstanding, D(t)?
12.4
Consider the Barro tax-smoothing model. Supp.
Econ 320 – Exam”Due Monday 46 at 1159pm Pacific timeN.docx
Econ 320 – “Exam”
Due Monday 4/6 at 11:59pm Pacific time
Name/section:
1 AS-AD
Consider the following AS-AD model. Please note that I have given you the AD curve explicitly
and simplified many of the expressions you saw in lecture and previous HW (i.e. no z, I already
solved for the relationship between unemployment and output, etc.).
Aggregate demand:
Y = 200 − 10P
Wage setting relationship:
w = P e(1 − u)
Price setting relationship:
P = 1.1w
Output and the unemployment rate:
u = 1 − Y
110
1. Derive the AS curve.
2. Solve for the medium run equilibrium output and price level.
3. Suppose P e = 30. Do you expect P e to rise or fall? Solve for the equilibrium price and
output level when P e = 30.
4. Suppose P e = 6. Do you expect P e to rise or fall? Solve for the equilibrium price and output
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2 European Competition Law
When new European Union member countries join the EU they become subject to the European
Union competition law – a law that regulates anticompetitive behavior and keeps markets within
Europe more competitive.
1. What effect will this have on the new member county’s natural rate of unemployment? Pro-
vide a graph supporting your answer.
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graph to support your answer.
3. Do you expect higher or lower inflation after the country joins the EU? Explain your answer.
1
3 IS-LM and Excess Reserves
Consider the following IS-LM model with a banking system:
Consumption:
C = 10 + 0.5YD
Investment:
I = 0.4Y − 100i
Government expenditure:
G = 5
Taxes:
T = 10
Money demand:
Md
P
=
Y
i
In periods of financial turmoil, banks often choose to hold excess reserves above and beyond what
they are required to hold by law. We shall denote the proportion of deposits held as excess reserves
as ρ and the required reserve ratio as θ. Suppose that consumers hold 37.5% of their money as
currency (c = 0.375) and the required reserve ratio is 20% (θ = 0.2). The banking system is then
described by:
Demand for reserves:
Rd = 0.2Dd + ρDd
Demand for deposits:
Dd = (1 − 0.375)Md
Demand for currency:
CUd = 0.375Md
Demand for central bank money (Hd) is the total amount of currency being demanded plus the
total demand for reserves. Suppose the price level is P = 1.
1. Suppose that that banks do not wish to hold excess reserves (ρ = 0) and that the supply of
central bank money is H = 500. Solve for the money multiplier and the overall money supply.
Explain/show your work.
2. Solve for equilibrium output and the equilibrium interest rate when H = 500.
3. Suppose that banks start holding 815 of their deposits as excess reserves (ρ =
8
15). Solve for
the new equilibrium output when H = 500. HINT: Overall money will be a whole number –
don’t round when calculating the new money multiplier. Output and interest rates will not.
4. Provide an IS-LM graph that demonstrates what happens to the general equilibrium when
banks increase th.
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quoctua 7(p,78s ? 1 fill in the Ponent square in I seure 2m. If using the following - Dominan allek,
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growth hormone can result in numerous disorders. Discuss one of these disorders, including
characteristics of the disorder. 4. Name a hormone secreted by a muscle cell and two hormones
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Questions on Differences in Virulence Study the diagram on t.pdf
Questions on Differences in Virulence Study the diagram on the following page and then answer
the following questions. 1. Pathogen A can bind to cells from which individuals? 2. Can individual 3
be infected by pathogen A ? Explain your answer. 3. Which individual do you predict would
experience more symptoms of infection with pathogen A - individual 1 or individual 2 ? Explain
your answer. 4. Draw pathogens and host cells to demonstrate why some pathogens might cause
less symptoms than others, even if they are using the same adhesins and receptors. Assume that
the difference is at the level of attachment, not some later step in the pathogenic
process.Pathogens and Cells for Questions on Differences in Virulence.
Questions for hearing and equilibrium the ear 1 What are .pdf
Questions for hearing and equilibrium (the ear) 1. What are the two skeletal muscles associated
with the auditory ossicles? What is the main function of these muscles 2 How does the crista
ampullaris work to maintain equilibrium? Be specific (describe) about structures associated with
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Questions 912 A study was conducted testing whether memory.pdf
Questions 9-12. A study was conducted testing whether memory for abstract ides is reduced if the
information is presented in distracting colors than when presented with non-distracting colors.
9. What is a Type I error for this study?
a. This study finds that memory for abstract ideas is reduced when presented in distracting colors
than when presented with non-distracting colors when it is the case that memory for abstract ideas
is reduced when presented in distracting colors than when presented in non-distracting colors
b. This study finds that memory for abstract ideas is the same when presented in distracting colors
than when presented with non-distracting colors when it is the case that memory for abstract ideas
is the same when presented in distracting colors than when presented in non- distracting colors
c. This study finds that memory for abstract ideas is reduced when presented in distracting colors
than when presented in non-distracting colors when it is the case that memory for abstract ideas is
the same when presented in distracting colors than when presented in non-distracting colors
d. This study finds that memory for abstract ideas is the same when presented in distracting colors
than when presented in non-distracting colors when it is the case that memory for abstract ideas is
reduced when presented in distracting colors than when presented in non-distracting colors
10. What is a Type II error for this study?
a. This study finds that memory for abstract ideas is reduced when presented in distracting colors
than when presented with non-distracting colors when it is the case that memory for abstract ideas
is reduced when presented in distracting colors than when presented in non-distracting colors
b. This study finds that memory for abstract ideas is the same when presented in distracting colors
than when presented with non-distracting colors when it is the case that memory for abstract ideas
is the same when presented in distracting colors than when presented in non- distracting colors
c. This study finds that memory for abstract ideas is reduced when presented in distracting colors
than when presented in non-distracting colors when it is the case that memory for abstract ideas is
the same when presented in distracting colors than when presented in non-distracting colors
d. This study finds that memory for abstract ideas is the same when presented in distracting colors
than when presented in non-distracting colors when it is the case that memory for abstract ideas is
reduced when presented in distracting colors than when presented in non-distracting colors
11. Which of the following is the type of correct decision when the null has been rejected and it
should have been rejected?
a. This study finds that memory for abstract ideas is reduced when presented in distracting colors
than when presented with non-distracting colors when it is the case that memory for abstract ideas
is reduced when presented in distracting colors than whe.
Questions 3 Please represent the integer numbers in the fol.pdf
Questions 3:
Please represent the integer numbers in the following formats:
01/10/1999 my birthday.
ddmmyyyy as a character string:
the numbers A, A as 1-byte Byte (DB);
the numbers A, B, -A, -B as 2-byte Word (DW);
the numbers A, B, C, -A , -B, -C as 4-byte Shortlnt (DD);
A = 01
B = 0110
C = 1,101,999.
Questions 2 A01B0110C1101999D00006E06432F5882 Pl.pdf
Questions 2: A=01B=0110C=1,101,999D=0.0006E=0.6432F=5.882 Please represent the
numbers, A, B, C, D, E, F in binary numeral system, also round the numbers to ten fractional
digits..
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addFrlend(): a glven Frlend should be added to the Frlend llst which Is a Queue object. That
means when you call thls functlon enqueue functlon from Queue should be trlggered and the new
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user name, but whenever this function is called the dequeue function from Queue should be
triggered. That means the Friend at the front should be removed from the list and his/her name
should be provided. 3. printFriendsF(); this should trigger the print() function of Queue so that you
can print all the Frlends from front to the end. 4. printFriendsR(); this should trigger the
reversePrint() function of Queue so that you can print all the Friends from end to the front. 5.
firstFriend(): this should trigger the peek() function of Queue so that you can print the Friend who
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main program should satisfy the following conditions: 1. As you read the presidents and their
home states from the file, your addFriend() function should enqueue them into the Friendlist. All
presidents become Friends. 2. Call firstFriend() function to see the earliest president name and
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Questions on Voters Registration a What are the qualific.pdf
Questions on Voters Registration
a. What are the qualifications of a voter?
b. What are the disqualifications?
c. Intending to run for Mayor in Quezon City for the 2025 NLE, what advice will you give DEF in
order to validly transfer his voters registration record from Manila City to Quezon City?
d. State the procedure to challenge a voters registration before the Election Registration Board?
e. Mr. Botante applied for new registration but there was an opposition filed against him in the
Election Registration Board (ERB). Consequently, Mr. Botantes application was denied. What are
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Questions relating to Party-List System of Representation.
a. What is the intention of the Constitution in providing for a Party-List System of Representation?
b. Who may join the Party-List System of Representation?
c. What are the parameters set in Atong Paglaum v. COMELEC?
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of Mayor in Manila City. Can ABC validly accept a nomination from ABAKADARARA Party-List for
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Queston 1
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Increase response time
Reduce traffic on access link
Increase bandwidth on access link
Reduce bandwidth on access link
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DNS
Cache
FTP
Cookies.
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QUESTIONS TRUE OR FALSE
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considered hazardous to human or environmental health because they degrade relatively quickly,
usually within 5 to 10 years.
True False
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Questions on Host Range Study the diagram on the next page and then answer the following
questions. 1. Pathogen A will bind to cells from which species? 2. Pathogen B will bind to cells
from which species? 3. Which pathogen has a broad host range? 4. Which pathogen has a narrow
host range? 5. Can pathogen A infect mice? Explain your answer. 6. For pathogen B attaching to
human cells, describe the shape of both the adhesin and the receptor that mediate attachment. Be
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to demonstrate tissue tropism -- why some pathogens might cause infect both respiratory and
gastrointestinal tract cells whereas other can infect only one or the other. Assume that the
difference is at the level of attachment, not some later step in the pathogenic process.Pathogens
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QUESTIONS Some protocols call for a shorter incubation time .pdf
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Questions on Differences in Virulence Study the diagram on t.pdf
Questions on Differences in Virulence Study the diagram on the following page and then answer
the following questions. 1. Pathogen A can bind to cells from which individuals? 2. Can individual 3
be infected by pathogen A ? Explain your answer. 3. Which individual do you predict would
experience more symptoms of infection with pathogen A - individual 1 or individual 2 ? Explain
your answer. 4. Draw pathogens and host cells to demonstrate why some pathogens might cause
less symptoms than others, even if they are using the same adhesins and receptors. Assume that
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Questions for hearing and equilibrium the ear 1 What are .pdf
Questions for hearing and equilibrium (the ear) 1. What are the two skeletal muscles associated
with the auditory ossicles? What is the main function of these muscles 2 How does the crista
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Questions 912 A study was conducted testing whether memory.pdf
Questions 9-12. A study was conducted testing whether memory for abstract ides is reduced if the
information is presented in distracting colors than when presented with non-distracting colors.
9. What is a Type I error for this study?
a. This study finds that memory for abstract ideas is reduced when presented in distracting colors
than when presented with non-distracting colors when it is the case that memory for abstract ideas
is reduced when presented in distracting colors than when presented in non-distracting colors
b. This study finds that memory for abstract ideas is the same when presented in distracting colors
than when presented with non-distracting colors when it is the case that memory for abstract ideas
is the same when presented in distracting colors than when presented in non- distracting colors
c. This study finds that memory for abstract ideas is reduced when presented in distracting colors
than when presented in non-distracting colors when it is the case that memory for abstract ideas is
the same when presented in distracting colors than when presented in non-distracting colors
d. This study finds that memory for abstract ideas is the same when presented in distracting colors
than when presented in non-distracting colors when it is the case that memory for abstract ideas is
reduced when presented in distracting colors than when presented in non-distracting colors
10. What is a Type II error for this study?
a. This study finds that memory for abstract ideas is reduced when presented in distracting colors
than when presented with non-distracting colors when it is the case that memory for abstract ideas
is reduced when presented in distracting colors than when presented in non-distracting colors
b. This study finds that memory for abstract ideas is the same when presented in distracting colors
than when presented with non-distracting colors when it is the case that memory for abstract ideas
is the same when presented in distracting colors than when presented in non- distracting colors
c. This study finds that memory for abstract ideas is reduced when presented in distracting colors
than when presented in non-distracting colors when it is the case that memory for abstract ideas is
the same when presented in distracting colors than when presented in non-distracting colors
d. This study finds that memory for abstract ideas is the same when presented in distracting colors
than when presented in non-distracting colors when it is the case that memory for abstract ideas is
reduced when presented in distracting colors than when presented in non-distracting colors
11. Which of the following is the type of correct decision when the null has been rejected and it
should have been rejected?
a. This study finds that memory for abstract ideas is reduced when presented in distracting colors
than when presented with non-distracting colors when it is the case that memory for abstract ideas
is reduced when presented in distracting colors than whe.
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Questions 3:
Please represent the integer numbers in the following formats:
01/10/1999 my birthday.
ddmmyyyy as a character string:
the numbers A, A as 1-byte Byte (DB);
the numbers A, B, -A, -B as 2-byte Word (DW);
the numbers A, B, C, -A , -B, -C as 4-byte Shortlnt (DD);
A = 01
B = 0110
C = 1,101,999.
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Questions 2: A=01B=0110C=1,101,999D=0.0006E=0.6432F=5.882 Please represent the
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This Gasta posits a strategic approach to integrating AI into HEIs to prepare staff, students and the curriculum for an evolving world and workplace. We will highlight the advantages of working with these technologies beyond the realm of teaching, learning and assessment by considering prompt engineering skills, industry impact, curriculum changes, and the need for staff upskilling. In contrast, not engaging strategically with Generative AI poses risks, including falling behind peers, missed opportunities and failing to ensure our graduates remain employable. The rapid evolution of AI technologies necessitates a proactive and strategic approach if we are to remain relevant.
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Embracing GenAI - A Strategic Imperative
Artificial Intelligence (AI) technologies such as Generative AI, Image Generators and Large Language Models have had a dramatic impact on teaching, learning and assessment over the past 18 months. The most immediate threat AI posed was to Academic Integrity with Higher Education Institutes (HEIs) focusing their efforts on combating the use of GenAI in assessment. Guidelines were developed for staff and students, policies put in place too. Innovative educators have forged paths in the use of Generative AI for teaching, learning and assessments leading to pockets of transformation springing up across HEIs, often with little or no top-down guidance, support or direction.
This Gasta posits a strategic approach to integrating AI into HEIs to prepare staff, students and the curriculum for an evolving world and workplace. We will highlight the advantages of working with these technologies beyond the realm of teaching, learning and assessment by considering prompt engineering skills, industry impact, curriculum changes, and the need for staff upskilling. In contrast, not engaging strategically with Generative AI poses risks, including falling behind peers, missed opportunities and failing to ensure our graduates remain employable. The rapid evolution of AI technologies necessitates a proactive and strategic approach if we are to remain relevant.
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Acetabularia acetabulum is a single-celled green alga that in its vegetative state is morphologically differentiated into a basal rhizoid and an axially elongated stalk, which bears whorls of branching hairs. The single diploid nucleus resides in the rhizoid.
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- 1. Question Ten: Nominal Rigidity Assume that the Bank of Zambia has the ability to control real interest rate. And suppose the economy is described by two equations. The IS equation given as Yt=rt/ while the money-market equilibrium condition: mp=L(r+e;Y). Where Lr+e< 0;LY>0;m and p denote logM and logP. a. Suppose prices respond partially to increases in money. Specifically, assume that dp= dm is exogenous, with 0<dp=dm<1. Also assume e=0. i. Find an expression for d r=dm. ii. Does an increase in the money supply lower the real interest rate? b. Suppose increases in money also affect expected inflation. Specifically, assume that de= dm is exogenous, with de=d m>0. Continue to assume 0<dp=dm<1. i. Find an expression for dr=dm. ii. Does an increase in the money supply lower the real interest rate? iii. Does achieving a given change in r require a change in m smaller, larger, or the same size as in part (a)? c. Consider Keynes's model of nominal rigidity where nominal wages are completely unresponsive to current developments, there is labour market imperfection, and firms are competitive with flexible prices. If there is an increase demand brought about by an increase in money stock, what would be the impact of this increase in demand on the real wage and output? You may use graphs to illustrate your answer. d. In your own words, explain the Lucas Critique and its implications for policy decisions based on statistical/econometric relationships.