Macroeconomics II
Philip Leatherwood, Lecturer
Kazakhstan Institute of Management, Economics, and Strategic Planning
27 March, 2001
Exercises—In Class and Homework
Due 3 April
1. Explain how money gets "made."
2. How do policy makers change money supplies? Explain each of their three tools.
3. Explain the determinants of the money multiplier. Derive the version given in the book—
mm = (1 + cu)/( re + cu)
4. Money policy "targets" might include interest rates, inflation rates, or exchange rates. What do you believe to be the most important current target for Kazakhstan's central bank? Support your answer.
5. How would currency markets respond to a sudden tightening of money growth in Kazakhstan?
6. Write a thorough critique of one of the following articles: The US—Kazakhstan Incomplete Similarity or We Have Not Learnt to Trade Properly. (Available at www.geocities.com/philipleatherwood)