November 20, 2003
Econ 101b: Fall 2003: Writing Assignment (9)

Econ 101b: Fall 2003: Short Essay Assignment Due in section on December 2, 2003 Surf over to the Federal Reserve's Federal Open Market Committee [FOMC] website at http://www.federalreserve.gov/fomc/. Pick either the minutes of the FOMC meetings for one of the past six years 1996-2002 (at http://www.federalreserve.gov/fomc/#calendars), or the transcripts of the FOMC meetings for one of the previous twelve years 1984-1995 (at http://www.federalreserve.gov/fomc/Transcripts/). Read through that year's minutes (or if you have chosen an earlier year, the much much longer but more interesting transcripts) with an eye toward understanding how the FOMC is making its decisions to raise or lower interest rates over the course of that year. Then write a short essay--five pages, 12-point, Times font, double-spaced, with graphs and diagrams if you think they are worth more than the words they displace. (We’ll stop reading at the end of page 5, so don’t write any more.) In your essay, first summarize how the FOMC made its decisions. Then explain how the thinking of the members of the FOMC does or does not make sense in terms of the models of the economy and of economic policy taught in this course....

Posted by DeLong at 10:43 AM

November 18, 2003
Econ 101b: Fall 2003: Problem Set 8

Problem Set 8....

Posted by DeLong at 01:32 PM

October 27, 2003
Econ 101b: Fall 2003: Problem Set 7

Problem Set 7....

Posted by DeLong at 08:42 PM

October 16, 2003
Econ 101b: Fall 2003: Problem Set 6

Problem Set 6....

Posted by DeLong at 01:06 PM

Econ 101b: Fall 2003: Problem Set 5

Problem Set 5....

Posted by DeLong at 01:06 PM

Econ 101b: Fall 2003: Mindo in Problem Set 6

Department of Professorial Stupidity Questions 4 and 5 in problem set 6 assume that the interest rate is a number like "5" and not a number like "5%". I'll fix this in the online version of the problem set....

Posted by DeLong at 12:59 PM

September 30, 2003
Econ 101b: Fall 2003: Problem Set 4

Problem Set 4....

Posted by DeLong at 02:26 PM

September 14, 2003
Econ 101b: Fall 2003: Problem Set 3

Economics 101b: Fall 2003: Problem Set 3 Due at start of section on September 16....

Posted by DeLong at 03:23 PM

September 02, 2003
Econ 101b: Fall 2003: Problem Set 2

Economics101b: Fall 2003: Problem Set 2 Due at start of section on September 9. 1. Consider an economy with the production function: (Y/L) = (K/L)a(E)1-a a. Suppose a = 1/3, E=1, L=100, and K=64; what is output per worker Y/L? b. Suppose a = 1/3, E=3, L=196, and K=49; what is output per worker Y/L? c. If both capital K and labor L double, what happens to total output Y? (Not output per worker Y/L, but total output.) d. Holding E=1, suppose that capital per worker increases from 2 to 4 and then from 4 to 6. What happens to output per worker? 2. Would the balanced-growth path of output per worker be shifted upward, shifted downward, or remain the same if capital were to become more durable--if the rate of depreciation on capital were to fall? 3. Consider an economy in which the depreciation rate is 3% per year, the rate of population increase is 2% per year, the rate of technological progress is 1% per year, and the private savings rate is 19% of GDP. Suppose that the government increases its budget deficit--which had been at 1% of GDP for a long time--to 4% of GDP and keeps...

Posted by DeLong at 06:10 AM

August 24, 2003
Econ 101b: Fall 2003: Problem Set 1 (Chapters 1 & 2)

Problem Set 1: Econ 101b: Fall 2003 (Chapters 1 & 2) Due at the start of section on September 2 1. Explain whether or not and why the following items are included in the calculation of GDP: Declines in business inventories The fees earned by real estate agents on selling existing homes Social Security checks written by the government Purchase of a new aircraft carrier by the Department of Defense Rent that you pay to your landlord Purchases of American-made trucks by foreign residents 2. Do you calculate real GDP by dividing nominal GDP by the price level or by subtracting the price level from nominal GDP? 3. Do you calculate the real interest rate by dividing the nominal interest rate by the price level or by subtracting the inflation rate from the nominal interest rate? 4. Are your answers to 2 and 3 the same? Since both sets of calculation aim to transform a real into a nominal quantity, shouldn't they be calculated in a parallel fashion? 5. In 1979 the (short-term) nominal interest rate on three-month Treasury bills averaged 10.0%, and the GDP deflator rose from 50.88 to 55.22. What was the annual rate of inflation in 1979?...

Posted by DeLong at 10:40 AM