Intermediate Macroeconomics

Lecturer: Tasneem Raihan University of California, Riverside

Intermediate Macroeconomics

Written Assignment – II

Due on March 16, 2018 in the lecture. No late submissions will be accepted.

Please answer the following chapter end questions.

Chapter 9:

Problems and Applications: 2

Chapter 18:

Questions for review: 1, 2, 3.

Problems and Applications: 2.

Questions of the special topics:

1. Write down the modern Phillips Curve equation and explain what each term means. Which tradeoff is captured by the Phillips Curve? Draw a graph showing this tradeoff i.e.

draw the Phillips curve.

2. Define demand-pull inflation. What condition in the Phillips Curve equation needs to be satisfied to characterize inflation as demand-pull?

3. According to the Phillips Curve equation, what is the expression for inflation rate when cyclical unemployment is zero?

4. What is the assumption of Adaptive Expectations? How do you modify the Phillips Curve equation to incorporate Adaptive Expectations?

More questions will be added on Monday.