term 1 lecture 2 - money in utility

Question 1

what does instantaneous utility depend on?

Answer 1

Question 2

what is the opportunity cost of holding money?

Answer 2

• 1) consumption
• 2) Investment with a positive return in the
  next period

Question 3

what is the household budget constraint?

Answer 3

B_1+M_1+P_1C_1 = M_0 + B_0(1+i_0) + Y_1 where B is bonds, i is the nominal interest rate, M is the money as cash, Y is income

Question 4

what is the equation for income?

Answer 4

Y=W+Tr where W is wage and Tr is transfers from government

Question 5

what is the households objective

Answer 5

Question 6

what is the equation for leisure?

Answer 6

Question 7

what is the formula for utility differentiated by the money?

Answer 7

Question 8

what is the trade off between consumption and real money>

Answer 8

Question 9

what is the formula for the demnad for money?

Answer 9

Question 10

how can the money demand be represented graphically?

Answer 10

Question 11

what occurs to the demand for money when the nominal interest rate Is equal to zero?

Answer 11

this is the zero lower bound

Question 12

what occured over the 2000s to the Fed rate and the excess reserves of depository institutions?

Answer 12

Question 13

what is the relationship between the demand for money with the interest rate and consumption?

Answer 13

Question 14

what is the formula for the velocity of money?

Answer 14

Question 15

what is the formula for the non logarithmic money demand?

Answer 15

Question 16

how is the money demand and the velocity of money related?

Answer 16

Question 17

what is the formula for the micro based IS- euler equation and how Is it derived?

Answer 17