Q: Suppose inflation is determined as in Section 12.8. Suppose
Suppose inflation is determined as in Section 12.8. Suppose the government is able to reduce the costs of inflation; that is, suppose it reduces the parameter a in equation (12.64). Is society made be...
See AnswerQ: Suppose a policymaker is in office for two periods. Output is
Suppose a policymaker is in office for two periods. Output is given by (12.63) each period. There are two possible types of policymaker, type 1 and type 2. A type-1 policymaker, which occurs with prob...
See AnswerQ: Describehoweachofthefollowingaffectsequilibriumemploymentandthewage in the Shapiro Stiglitz model: (a) An
Describehoweachofthefollowingaffectsequilibriumemploymentandthewage in the Shapiro Stiglitz model: (a) An increase in workers’ discount rate, ρ. (b) An increase in the job breakup rate, b. (c) A posit...
See AnswerQ: Suppose that output is given by y = yn +b(
Suppose that output is given by y = yn +b(π − πe), and that the social welfare function is γy−aπ2/2, where γ is a random variable with mean γ and variance σ2 γ . πe is determined before γ is observed;...
See AnswerQ: Consider a discrete-time version of the analysis of money growth
Consider a discrete-time version of the analysis of money growth, inflation, and real balances in Section 12.1. Suppose that money demand is given by mt − pt = c−b(Etpt+1 − pt), where m and p are the...
See AnswerQ: Consider a discrete-time model where prices are completely unresponsive to
Consider a discrete-time model where prices are completely unresponsive to unanticipated monetary shocks for one period and completely flexible thereafter. Suppose the IS equation is y = c −ar and tha...
See AnswerQ: Assume, as in Problem 12.2, that prices are
Assume, as in Problem 12.2, that prices are completely unresponsive to unanticipated monetary shocks for one period and completely flexible thereafter. Assume also that y= c −ar and m − p = b +hy−ki h...
See AnswerQ: Consider the Tabellini Alesina model in the case where α can only
Consider the Tabellini Alesina model in the case where α can only take on the values 0 and 1. Suppose that the amount of debt to be issued, D, is determined before the preferences of the period-1 medi...
See AnswerQ: Consider the Tabellini Alesina model in the case where α can only
Consider the Tabellini Alesina model in the case where α can only take on the values 0 and 1. Suppose, however, that there are 3 periods. The period-1 median voter sets policy in periods 1 and 2, but...
See AnswerQ: Suppose there aretwoperiods.Governmentpolicywillbecontrolledbydifferentpolicymakers in the two periods. The objective
Suppose there aretwoperiods.Governmentpolicywillbecontrolledbydifferentpolicymakers in the two periods. The objective function of the period-t policymaker is U + αt[V(G1)+V(G2)], where U is citizens’...
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