課程名稱︰總體經濟學（上）
課程性質︰
課程教師︰蔡宜展
開課學院：社科
開課系所︰經濟
考試日期（年月日）︰2017.12.8
考試時限（分鐘）：180
試題 :
1 IS and LM model (30 points)
1. Use the IS LM model to analyze the effects of an expansionaty fiscal policy
(i.e. an increase in government expenditure) on the output, consumption,
investment, and interest rate.
2. Use the ID LM model to analyze the effects of the expansionary monetary
policy (i.e. an increase in money supply) on the output, consumption,
investment and the nominal interest rate.
2 Labor market (40 points)
Consider an economy in which the labor market is competitive. There is
representative firm with technology given by the following production function
Y=A*L^(1-a)
where Y denotes the goods produced, A technology level, a parameter that lies
between (0,1) and L labour hours in production. There is also a representative
household who chooses between consumption and leisure, with preferences given
by
u(c,h)=log(c)+n*log(h)
where h denotes leisure and c denotes consumption. Each household has T hours
of time endowment that he/she can allocate between leisure and labor. Note
that we assume households own the stock of the firm, thus the income for the
household includes both labor income and the profit. Assume that the price of
the consumption good us equal to P and the nominal wage is W in the economy.
1. What is the marginal product of labor(MPL)? How does the MPL change as L
increases?
2. Suppose the objective of the firm is to maximize its profit. What is the
optimal labor demand? Sketch the labor demand as a function as a function
of the real wage.(using the y-axis for the real wage, and x-axis for labor)
3. Consider now the decision problem of the household. Let T-h denote the
number of hours that an agent works. Write down the agent's budget constraint
and express it in terms of c and h. What is the slope of the budget
constraint?
4. State the agent's maximization problem and characterize the optimal
behavior of the household regarding consumption and leisure choices.
5. Impose the labor market clearing condition to find the equilibrium labor
hours and the equilibrium wage.
6. What happen to the equilibrium real wage W/P following an increase in A?
Can you explain why?
3 Two period optimization problem (30 points)
A consumer recieve income y1 and y2 in the first and second preiod. The
consumer can lend or borrow at the real interest rate i. Suppose his/her
consumption in the first and second period are c1 and c2, respectively.
a. Derive the consumer's lifetime budget constrain from the consumer's
current-period and future-period budget constraints.
b. Plot the consumer's lifetime budget constraint, and what is the slope
of the budget constraint?
c. Use the figure of indifference curve and the budget constraint to show
consumer's optimal choices.
d. What are the effects of an increase in future income on conumption in each
period, and on saving?
e. What are the effects of an increase in the real interest rate on
consumption in each period and on savings? How does this depend on income and
substitution effect and whether the consumer is a borrower or lender?