Past Exam for ECN 200E - Macro Theory at UC Davis (UCD)

Exam Information

Material Type:Final
Class:ECN 200E - Macro Theory
University:University of California - Davis
Term:Spring 2001
  • The Economy
  • Steady-State Equilibrium
  • Necessary Condition
  • Programming Problem
  • Preferences
  • Interesting
  • The Business Cycle
  • Business Cycle
  • Steady State
  • Consumption
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Sample Document Text

Economics 200E, Final Spring 01 Final Exam Directions: Answer all questions - Point totals for each are given in parentheses. Good luck and enjoy your summer - after the prelims. 1.(25) One of the main challenges of the real business cycle research program has been achieving consistency between the model's predictions for the cyclical behavior of labor and the data. Discuss the nature of the inconsistencies and the modeling responses made in order to improve the performance of the model. Do you think the current state of RBC models reproduce to a reasonable degree labor market behavior observed in the U.S. economy? 2.(25) Consider the following optimal growth model. Agents' preferences are given by E 0 ! t 0 . * t c t 1 + 1 + while output is a linear function of beginning of period capital and a technology shock. That is, y t z t k t It is assumed that z t is i.i.d. a. Solve for the optimal consumption function in this economy (use the conjecture and verify method). b. Suppos...

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