Solutions Manual

for use with

Macroeconomics European edition

N. G R EGORY MAN KI W
M A R K P . TAY LO R

John Fernald

Emanuel Kohlscheen
University of Warwick

Mark P. Taylor
University of Warwick

WORTH PUBLISHERS
Solutions Manual
by John Fernald, Emanuel Kohlscheen, Mark P. Taylor
for use with
Mankiw/Taylor: Macroeconomics, European Edition

© 2008 by Worth Publishers

All rights reserved.

The contents, or parts thereof, may be reproduced for use with

Macroeconomics, European Edition, by N. Gregory Mankiw and Mark P. Taylor,
as described in the Preface to this Solutions Manual, but may not be reproduced in any
form for any other purpose without prior written permission of the publisher.

ISBN 13: 978-0-7167-8379-4

ISBN 10: 0-7167-8379-7

Printed in the United States of America.

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Contents

Answers to Textbook Questions and Problems 1

Chapter 1 The Science of Macroeconomics 3
Chapter 2 The Data of Macroeconomics 5
Chapter 3 National Income: Where It Comes From and Where It Goes 11
Chapter 4 Money and Inflation 23
Chapter 5 The Open Economy 28
Chapter 6 Unemployment 48
Chapter 7 Economic Growth I 54
Chapter 8 Economic Growth II 65
Chapter 9 Introduction to Economic Fluctuations 74
Chapter 10 Aggregate Demand I 82
Chapter 11 Aggregate Demand II 91
Chapter 12 The Open Economy Revisited 111
Chapter 13 Aggregate Supply 136
Chapter 14 Stabilization Policy 145
Chapter 15 Government Debt 149
Chapter 16 Common Currency Areas and European Economic
and Monetary Union 153
Chapter 17 Consumption 165
Chapter 18 Investment 171
Chapter 19 Money Supply and Money Demand 177
Chapter 20 Advances in Business Cycle Theory xxx

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