Problems: (a) Describe in brief the three approaches to measuring GDP. How do they relate to one another? How do they differ? (b) Economic Time Series are often decomposed into a Trend, a Seasonal component, and a Cyclical com ponent. What is the difference between the seasonal and cyclical components? Where do business cycles show up in this decomposition? (c) What is a. competitive equilibrium model? What are marketclearing conditions? ((1) In what ways does the Solow Growth Model accurately describe the modern world? In what ways does it fail to match with realworld patterns? (e) Give an example of a credit market imperfection, and describe how such an imperfection changes the role of government policy. (f) Consider the denition of a 2period closedeconomy competitive equilbirium model. What changes do we need to make to our assumptions/ definitions to change the model to describe a Small Open economy instead of a closed economy? 2 Comparing Crop one question at atime ierent assumptions. (4 pts) For question 2, compare the effects of the same shock in different version of the model. Problems: (g): Suppose we have a closed economy model with neutral money. (ch12) The monetary agency increases the money supply. sketch the effects of this shock. w NW r ya P MS MD N V M