Econ 302 - Intermediate Macroeconomics Summer 2023 Assignment 1
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Econ 302 - Intermediate Macroeconomics
Summer 2023
Assignment 1
DUE: Sunday July 16th by 11pm. SUBMISSION: upload a PDF of your assignment by 11pm on Canvas.
Worth: 20 points
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INSTRUCTIONS: There are FOUR questions. Answers to question 3 & 4 must be typed (you can type answers to question 1 & 2 as well, but it is NOT required). |
1. 3 points. Complete the calculations below. Show all work to get credit.
Suppose that the # of Employed = 160 million, the # in Labor Force = 180 million, and the Adult Civilian Population = 240 million.
a. Calculate the labor force participation rate.
b. Calculate the Employment to Adult Civilian Population ratio.
c. Calculate the Unemployment rate.
2. 7 points. The following questions refer to the production function (chapter 3)
a. Draw the production function (with N on the x-axis). Why is it upward sloping? Provide an intuitive explanation.
b. Define MPN (i.e. Marginal product of labor)? What does it measure? Explain providing intuition.
Suppose that there is a rise in total factor productivity (i.e. rise in “A”).
c. What is the impact of the rise in total factor productivity on the production function and on MPN. Why? Do not draw the diagram yet, only discuss the economic reason for the shifts in the curves. I.e. you want to explain providing economic reason (intuition) what the impact is on production and MPN at this point.
d. Continue with c. Use a diagram to show the impact on the production function and on the MPN. Draw two separate diagrams for each variable. Label all curves and all axes.
e. How does the labor market adjust to the new equilibrium? I.e. How do firms and workers respond to the change in w; what happens as w changes?
f. Now use the production function diagram to show the overall impact on full-potential. Provide a complete diagram as done in lecture.
ANSWERS FOR QUESTION 2 & 3 MUST BE TYPED!
3. 5 points. Watch the following Video: The FED explains Monetary Policy(link also on iLearn) and then answer the questions below:
a. What is the goal of monetary policy?
b. What does it mean for the FED to act as “the lender of last resort” & why is that important?
c. What is the Dual Mandate?
d. What are the tools the FED uses to conduct monetary policy?
e. What were the new tools that the FED utilized (and developed) following the Financial Crisis of 2008 as discussed in the video.
REMARK: provide your answers for each question individually, one by one (not in one single paragraph form). Answers can be very brief as needed.
4. [5 points] This question requires the use of the FRED Database as in the Participation Questions that you completed this week on Canvas.
You are required to 1. Obtain a figure with specific data and 2. Discuss the data briefly.
1. FIGURE (must be submitted along with the discussion)
Use FRED to plot the following 3 time series (macroeconomic variables) on ONE single diagram: Unemployment rate (UNRATE), Female Unemployment rate, and Male Unemployment rate. All 3
series must be plotted together on one single diagram.
Use Monthly data from 1975 to the present.
Edit Figures: To include all 3 variables, edit the figure & choose to “add line” to add multiple series/variables to the same Figure, etc. Then download it and submit it along with a discussion of the data. The figure should have ALL 3 VARIABLES TOGETHER in ONE single diagram. A video illustrating how to navigate FRED is posted on Canvas.
2. DISCUSSION
In 100-200 words discuss the data in the figure. You what to discuss any patterns you observe, if there is a trend or not, how the data looks in recessions vs. expansions, some of the noticeable highs or lows. Do not only focus on the last few years. In the discussion, you also want to provide some specific values (#s), providing specific stats. Your goal is to describe the data, and to compare the series as well.
QUICK REMARK:
Each HW is worth 25% of the total HW score. Since the weight of the HW in your final course grade is 30%, this means that each HW is 7.5% of your final course grade (0.3*0.25). Hence, not completing the HW will drastically affect your grade.
I strongly urge you to attempt all questions, as at the end of the course, every single point counts. Not completing questions implies losses of points that add up and can make a difference, such as leading to a C+ instead of a B-, etc.
2023-07-16