|
The intent of your final exam is to demonstrate how you can apply the economic concepts
that you have learned in this class to current business situations. This
has been the main focus of the lectures and classroom discussions.
Your take home final exam/project consists of 3 parts for a total of 100
points:
Due Date: Friday, February 15th
2008 (before the start of the afternoon class)
You will turn in a hardcopy of your take-home
exam on the scheduled final exam day.
No emailed exams will be accepted. If you cannot attend that day, you must
arrange to turn in your exam in advance.
NO LATE EXAMS WILL BE ACCEPTED UNDER ANY CIRCUMSTANCES
_________________________________________________________________________________________________
I. (5
points) Using the One Year Model, build a Simple Macroeconomic Model for an economy with a GDP of
$10,400 Billions [Remember: Econ 101 Rule applies for building such an
economy]. Copy the above exogenous and parameter values for the
simulation. Do a Constant Growth Money Supply
Experiment, with a constant growth of 5%. Print and explain
the following two “Simulation Property Graphs” after doing the
experiment:
a. GDP
vs. GDP Potential b. Money Supply Growth vs. Inflation
II. (10 Points) Oil Price Shock Experiment: Using
the original One Year base economic model (GDP = $7000 Billions), give
the economy an Oil Price Shock. Decide which exogenous variables,
if changed and by how much, would mean an Oil Price Shock. Defend
your reasoning. [Remember: Econ 101 Rule applies for building
such an economy]. Copy the above exogenous and parameter values for the
simulation, and run it. Print the
results page (the one which has the values for the new economy (with
Oil Price Shock) and the base case for historical, short-run and
long-run.
III. (25 points) Using
the One Year Model, build a Realistic
Macroeconomic Model for an economy with a GDP of $10,400 Billions
[Remember: (a) Econ 101 Rule
applies for building such an economy (b) Realistic Macroeconomic Model is
the economy in which both the Trade Deficit and Fiscal Deficit would be negative
numbers in $350 to $550 billion range]. Print the results of the One Year
Model on a sheet of paper which shows the values of exogenous, endogenous
and parameter values for your answer.
_________________________________________________________________________________________________
HINTS:
1. Whenever
building a new one-year model, start out with bringing the GDP@FULL and
GDP@ROW to the desired GDP level.
2. Money
Supply is a lever for inflation. They are directly proportional.
3. Check
the Macroeconomic Model Guide to understand the various relationships
between exogenous and endogenous variables to decide which variables if
changed would help apply the Econ 101 rule.
4.
For the Realistic Macroeconomic Model,
besides changing the exogenous variables you might need to change some
parameter values to get the desired results.
Answers to FAQ’s
1. Your
paper must be typed and double-spaced.
When discussing the articles you have chosen, you will attach a
copy of each article to your write-up.
2. Length
of the write-up:
a. Up to 1 page or a maximum of 500 words per presenter.
b. Up to 2 pages or a maximum of 800 words per article.
3. You
can choose 2 articles either on separate concepts or all on the same
economic concept. This concept(s)
should be related to the speakers’ presentations. Note that the
philosophy of this class was that things happen simultaneously – that is,
they are interconnected. This
means that my presentation at the conference should be used as a guide to
critique the articles.
4. A single group can have no more than 1 article in common
among the members. This means that
in review of your group’s final exams, each person must use at least 1
article that is not covered by any other group member. Also, give us a
printed copy of the 2 articles you choose for your analysis!
.
|
