The second midterm is February 16. The exam is cumulative and covers all homeworks and lectures up to and including last Wednesday, February 9. Technically, this must be so since the model we developed most recently, the AD-AS model, incorporates virtually everything we have done since the first lecture.


I suggest the following strategy for studying. (i) Start by looking at the lectures since the Monday before the first midterm, very carefully. Make sure you can reproduce all the experiments that were done, and that you can provide the rationale for each building block in our model: the goods market, the financial market and the labor market. When you encounter things in your notes that you find difficult to understand, go back to earlier lectures and/or the relevant part of the book. (ii) Study carefully the work you did on the homeworks since the first midterm. (iii) Study the material you looked at before the first midterm.


Since the first midterm, we covered Chapter 6 (not the discussion of efficiency wages on page 121) and Chapter 7.


The exam will resemble what I’ve given in previous years.


Here is the midterm. Here are the answers.