Skip to article frontmatterSkip to article content
Site not loading correctly?

This may be due to an incorrect BASE_URL configuration. See the MyST Documentation for reference.

Economics
Johns Hopkins University

Midterm Exam 1

Modeling Macroeconomics | Lecture 08

Johns Hopkins University

Exam Format

Part I: Multiple Choice (75 points)

30 questions at 2.5 points each. Questions cover concepts, definitions, and interpretation of results across all five topic areas below.

Part II: Free Response (25 points)

6 questions requiring derivations, short responses, and fill-in-the-blank. Topics:

  1. Fill-in-the-blank: transitory vs. permanent MPC, habit formation, equity premium puzzle

  2. Perturbation argument for the Euler equation

  3. Hall (1978) random walk: role of quadratic utility and the precautionary saving motive under CRRA

  4. Derivation: two-period CRRA consumption function

  5. Derivation: infinite-horizon human wealth and the MPC decomposition into income and substitution effects

  6. Derivation: Lucas tree price-dividend ratio under log utility

Topics Covered

ModuleTopic
03Intertemporal choice, Euler equation, Fisherian separation, OLG
04Envelope condition, perfect foresight CRRA, random walk (Hall 1978), CEQ/Muth
05Habit formation, durable goods, quasi-hyperbolic discounting
06CRRA with risky returns, CARA with income risk, Campbell-Mankiw
07Lucas tree, C-CAPM, equity premium and riskfree rate puzzles
MoMa
Lecture 07
MoMa
About GW OSCON