Division of Applied Undergraduate Studies (DAUS)

Summer 2024

Introduction to Macroeconomics

ECON1-UC 301 050

Assignment 3

Instructions:

This homework is due by midnight on Saturday  August 10. Please upload your 3-4 page paper (in .doc or .docx but not PDF format) on Brightspace.

Any emailed responses will automatically result in an F.

Please do not use any outside sources including non-academic ones (Investopedia, Wikipedia etc. You will automatically lose points if you do so.

Use your own writing (and no AI software which can be detected easily) along with in-text citations when appropriate.

Prompt:

This prompt requires you to understand how and why Robert Hockett challenges the loanable funds model of credit creation. Briefly explain the following models in his article:

a) The neoclassical models in Figures 1 and 2: customer savings control the credit supply.

b) The endogenous credit models in Figures 3 and 4 explain how public authority (central bank) is central to accommodation and monetization. Explain briefly what these terms mean.