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18 Aug 2018
A. True or false (9 marks total) For each of the statements in Section A, determine whether it is true or false, then explain in a few sentences why that is the answer. Note: no marks will be given for answers that do not include an explanation.
1. (3 marks) In practice, the Bank of Canada sets a target for real money balances and then the interest rate automatically adjusts to ensure this target is met.
2. (3 marks) In the Mundell-Fleming model, in general the level of domestic investment could depend both on foreign and domestic economic conditions.
3. (3 marks) The Solow model attempts to explain growth in output over the very long run through increases in the capital stock, reductions in the unemployment rate, and increases in technology.
A. True or false (9 marks total) For each of the statements in Section A, determine whether it is true or false, then explain in a few sentences why that is the answer. Note: no marks will be given for answers that do not include an explanation.
1. (3 marks) In practice, the Bank of Canada sets a target for real money balances and then the interest rate automatically adjusts to ensure this target is met.
2. (3 marks) In the Mundell-Fleming model, in general the level of domestic investment could depend both on foreign and domestic economic conditions.
3. (3 marks) The Solow model attempts to explain growth in output over the very long run through increases in the capital stock, reductions in the unemployment rate, and increases in technology.
Nelly StrackeLv2
20 Aug 2018
