Practice Problems

Practice Final Exam
Practice Exam 3
Practice Exam 2
Practice Exam 1

Week 1: Measuring the Macroeconomy

Instructional Videos

  1. Calculating Nominal and Real GDP
  2. Calculating Inflation using the GDP Deflator
  3. Calculating Inflation using the CPI
  4. Calculating Real Wages
  5. Measuring Unemployment

Reading

Williamson, Chapter 2

Exercises

Week 2: Optimal Behavior of Consumers and Producers

Instructional Videos

  1. Utility Definitions and Assumptions
  2. Indifference Curves
  3. Introduction to Consumption/Leisure Model
  4. Maximizing Utility in Cons/Leisure Model
  5. Impact of a Change in Non-Wage Income
  6. Impact of a Change in Wage
  7. Income and Substitution Effects
  8. Introduction to Production Functions
  9. Shape and Shifts of Production Functions
  10. Increase in Capital Stock
  11. Profit Maximizing Labor Demand
  12. General Equilibrium

Reading

  • Optimal consumption and leisure decisions of a representative household: Williamson, Chapter 4, pp. 98-117
  • Optimal labor demand and production decisions of a representative firm: Williamson, Chapter 4, pp. 122-135

Exercises

Week 3: Socially Optimal Model

Instructional Videos

  1. Finding the Optimal Allocation
  2. Improvement in Technology
  3. Impact of Government Expenditure

Reading

  • Socially optimal allocation of consumption and leisure: Williamson, Chapter 5, pp. 142-150
  • Pareto optimality of competitive equilibrium: Williamson, Chapter 5, pp. 150-155
  • Optimal responses of the economy to government expenditure and technology shocks, Chapter 5, pp. 155-164

Exercises

Week 4: Solow Growth Model

Instructional Videos

  1. Model Framework
  2. Capital Evolution
  3. Solving the Model
  4. Growth
  5. Steady State
  6. Change in Saving
  7. Improvement in Technology
  8. Change in Capital Depreciation
  9. Change in Population Growth

Reading

  • Solow growth model: Williamson, Chapter 7, pp. 249-255
  • Long-run effects from changes to savings, technology, depreciation, labor force growth, Chapter 7, pp. 255-264

Exercises

  • Canvas Multiple Choice Quiz
    due Wednesday 11:59 PM
  • Solow Growth Model
    due Friday 11:59 PM

Week 6: Growth Models and Income Disparity

Instructional Videos

  1. Convergence in Solow Growth Model
  2. Growth in Technology
  3. Differences in Access to Technology
  4. Model with Human Capital
  5. Differences in Education and Training

Reading

  • Convergence & divergence in economic development: Williamson, Chapter 8, pp. 281-290
  • Endogenous growth with human capital accumulation: Chapter 8, pp. 290-300

Exercises

Week 7: Consumption and Saving

Instructional Videos

  1. Intertemporal Budget Constraint
  2. Graphical Intertemporal Budget Constraint
  3. Optimal Consumer Behavior
  4. Increase in Future Income
  5. Increase in Interest Rates on Borrowers
  6. Increase in Interest Rates on Savers
  7. Ricardian Equivalence
  8. Temporary Increase in Income
  9. Permanent Increase in Income
  10. Temporary Increase in Government Expenditures
  11. Permanent Increase in Government Expenditures

Reading

  • CConsumption and savings decisions: Williamson, Chapter 9, pp. 306-321
  • Effects on decisions from changes in income: Chapter 9, pp. 321-324
  • Effects on decisions from changes in interest rates for savers and borrowers: Chapter 9, pp. 327-332
  • Ricardian Equivalence: Chapter 9, pp. 337-343

Exercises

Week 8: Dynamic Model of Consumer and Producer Decisions

Instructional Videos

  1. Intertemporal Budget Constraint
  2. Consumption and Leisure Choices
  3. Consumption Demand
  4. Labor Supply
  5. Labor Supply and Interest Rates
  6. Profit Maximization
  7. Investment Demand
  8. Shifts in Investment Demand

Reading

  • Two-period dynamic model - Consumer decisions for consumption, saving, leisure, and labor supply: Williamson, Chapter 11, pp. 379-388
  • Two-period dynamic model - Producer decisions for labor demand, investment demand, and production: Chapter 11, pp. 389-397

Exercises

Week 10: Dynamic General Equilibrium Model

Instructional Videos

  1. Output Supply
  2. Output Demand
  3. General Equilibrium Framework
  4. Improvement in TFP
  5. COVID Decreases TFP
  6. Destruction of Capital Stock
  7. Government Expenditures Impact on Output Supply
  8. Increase in Government Spending
  9. Announcement of New Technology
  10. Permanent Improvement in Technology

Reading

  • Competitive general equilibrium in the two-period dynamic model: Williamson, Chapter 11, pp. 401-414
  • Dynamics macroeconomic effects from changes in government expenditures: Chapter 11, pp. 414-417
  • Dynamics macroeconomic effects from changes in capital stock: Williamson, Chapter 11, pp. 417-421
  • Dynamics macroeconomic effects from changes in total factor productivity: Chapter 11, pp. 421-425

Exercises

Week 11: Dynamic Model with Money

Instructional Videos

  1. Fisher Equation
  2. Cash Versus Credit Goods
  3. Demand for Credit Goods
  4. Shift in Demand for Credit Goods - Interest Rate
  5. Shift in Demand for Credit Goods - Income
  6. Money Demand
  7. Full Model Introduction
  8. Drop in Consumption Demand
  9. Improvement in Productivity
  10. Money Neutrality
  11. Monetary Surprises

Reading

  • Dynamic model of money supply and demand: Williamson, Chapter 12, pp. 442-457
  • Complete dynamic macroeconomic model with money: Chapter 12, pp. 457-459
  • Money neutrality: Williamson, Chapter 12, pp. 460-464
  • Shifts in Money Demand: Chapter 12, pp. 464-467

Exercises

Week 13: New Keynesian Model

Instructional Videos

  1. Disequilibrium Effects of Sticky Wage
  2. Improvement in Consumer Optimism
  3. Increase in Government Expenditure
  4. Real Effects of Monetary Policy
  5. Framework for Unemployment

Reading

  • New Keynesian model framework: Williamson, Chapter 14, pp. 509-513
  • Non-neutrality of money: Chapter 14, pp. 513-515
  • Government policy in the New Keynesian model: Williamson, Chapter 14, pp. 515-518

Exercises

Instructor

James Murray, Ph.D.

  2106 Wittich Hall
  608-785-6828
    608-406-4068
  jmurray@uwlax.edu

Student Hours Appointments

Student hours appointments are available with as little as a 30-minute notice, and are generally available at the following times:

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  • 1:30 PM - 2:30 PM Mon/Wed/Fri
  • 2:30 PM - 4:30 PM Tue/Thurs
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