RE: CSM - Wachtel, Chapter 3

Sce, Michael ( (no email) )
Thu, 15 Apr 1999 08:36:28 -0400

Ques. 3
I don't think it's a good idea to separate "the market" into goods & money.
How about goods & services? The purpose of this exercise, I think, is to
understand the whole, the macro, part. So, the market includes goods,
money, services & anything else.

Once you separate into parts, they each may be out of balance. Put them
together, they balance.

Ques. 13
I can't find the quote in the text on page 48.

Ques. 9
Is this A-9, B-9, or C-9?
Solutions for B-9 and C-9 seem self-explanatory to me.
A-9 is a trick question with the use of the word "solely". So, it's false.

-----Original Message-----
From: collision@email.com [SMTP:collision@email.com]
Sent: Wednesday, April 14, 1999 5:01 PM
To: CAS Part 5A
Subject: CSM - Wachtel, Chapter 3

In the CSM - Wachtel Chapter 3 (p. 179)
Q. 3
(T/F) The economy is in equilibrium when desired savings equals
desired investment.

Answer (TRUE)

My question is:
While this is true for the goods market, is it also true for the
money market?

My assumption:
Based on the answer given by CSM, because "the goods and money
markets interact to determine the equilibrium values for both output and
interest rates." it is true . . . is my reasoning correct?
**********************************************
In the CSM - Wachtel Chapter 3 (p. 187)
Q. 13
(T/F) Economists who favor a monotarist approach to economics
believe there exists a strong relationship between money demand and interest
rates.

Answer (FALSE):
According to the CSM, "they place little importance on this
relationship"

Cna anyone shed light on why this is???

In the CSM - Wachtel Chapter 3 (p. 189)
Any one else find Question 9 to be confusing???
Question 3 makes sense, but I can't seem to make the connection
between the two . . .
CAN ANYONE HELP?

Thanks

C-

-----------------------------------------------
FREE! The World's Best Email Address @email.com
Reserve your name now at http://www.email.com