中级宏观经济学作业四

Chapter 10~11

1.Suppose there is an increase in the number of ATM machines in service. What are

the effects of this innovation on the demand for money and on the price level?

2.The issuers of credit cards demand payment every two weeks instead of every

month. Determine the effects on money demand and on price level. Explain your results.

3.Suppose that the preferences of the representative household change in such a way

that the worker in the household becomes more willing to work, in that he or she requires less compensation in terms of consumption goods to supply an extra unit of labor, given any consumption-leisure bundle.

a.Now suppose that the monetary authority wishes to stabilize the price

level (hold the price level constant). How would the money supply

change in response to the change in preference in order to accomplish

this?

b.Suppose there is a temporary increase in total productivity, and the

monetary authority wishes to stabilize the price level. What would be the

effects of the increase in the total factor productivity on the money

supply?

4.Suppose that the quantity of government purchases increases permanently, and

that this increase in government spending is financed by an increase in the growth rate x of the money supply. That is, the increase in government spending is financed through seignorage. Determine the effects on current equilibrium inflation, employment, output, the real wage, the real interest rate, the nominal interest rate. Explain your results.

Chapter 15

1.Suppose that the central bank wishes to reduce the price level, and announces that

it will reduce the money supply to accomplish this. Use the money surprise model to answer the following questions:

a.Suppose the public does not believe that the central bank is serious about

reducing the price level. What happens to real aggregate variables and

the price level?

b.Suppose, alternatively, that the public believes the central bank

announcement. What happens to real variables and the price level now?

pare your results in part (a) and part (b). In which case does the

price level change more for a given reduction in the money supply?

What do you think a central bank can do to make it policy

announcements more credible?

2.In the money surprise model, compare the performance of the economies in two

countries that are identical in all respects but one: in country a the money supply is highly variable, while in country b there is little variability in money supply. For

a given surprise increase in the money supply, determine with the aid of diagrams