Airlangga University

Faculty of Economics and Business

Doctoral in Economics Program

Mid Term Examination

Subject : Matematic for Economic Dynamics

Exam date : ….
Exam type : Take home exam
Time to submit : Saturday, 12 Oktober 2019;
14.00 WIB

1. Describe comparison between difference and differential equation. Provide

some examples.
2. The aggregate consumption function is: Ct 1  a  bYt ; 0<  <1; 0<b<1.


Aggregate income is determined by Yt  Ct  I , I is a constant level of

aggregate investment. Derive the difference equation for aggregate income.
Discuss some economic interpretation for this model.
3. Refer to A Multiplier-Accelerator Model page 840 in Hoy et al., re-do and
explain step by step from equation Yt  Ct  I t  Gt until you have the equation
__

Yt  C r  C r 
t G
t

1  g  t 2
. Discuss the economic
1  m 1  g  2 (1  m)  g
1 1 2 2

interpretation.
4. Refer to The Dynamics of IS-LM model in page 866 in Hoy et al.,. Write
down step by steps until you have the following equation:

 __ __

Y    a  bY  IR  I  G  Y  ,   0 . Discus the economic interpretation.
 
5. Refer to A Walrasian Price Adjustment Model in page 915 in Hoy et al.,. Write
down step by steps until you have the following equation:
  __
p  p mp  m c
. Discus the economic interpretation.

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