ECON Exam
MID-TERM EXAM: ECON 2123 (Macroeconomics)
Professor Yong Wang
10am-12pm, November 3, 2012
NAME
ID#
Instructions. There are three parts (12 pages) in this exam. Justify your answers in Part 2 and Part 3. Don’ panic even if you …nd some question di¢ cult; it may be di¢ cult for others t as well. Allocate your time wisely: answer the easy questions …rst and do not dwell on a single question for too long. An important way to please your grader is to write your answers neatly. No electronic devices (except calculators) can be used during the exam. Good luck!!
1. Choose the best alternative that completes the statement or answers the question [30 points]
(1) Suppose the consumption equation is represented by the following: C = 100 + :75YD .
The multiplier in this economy is _________
(A) 5 (B) 0.75 (C) 0.25
(D) 1.33 (E) 4.
(2) A …rm’ value added equals _________ s (A) its revenue minus its wages.
(B) its revenue minus its cost of intermediate goods.
(C) its revenue minus all of its costs.
(D) its revenue minus its wages and pro…t.
(E) none of the above.
(3)Suppose you are provided with the following data for your country for a particular month:
100 million people are working, 10 million are not working but are looking for work, and 20 million are not working and have given up looking for work. The o¢ cial unemployment rate for that month is___
(A) 7.7% (B)9.1%
(C) 23%
(D) 30% (E) 10%
(4) If nominal GDP rises from $1000 trillion to $1200 trillion, while the GDP de‡ ator rises from 2.0 to 2.2, the percentage change in real GDP is approximately equal to______
(A) 20%
(B) -9.1%
(C) 10%
(D)-10% (E)9.1%
(5) Which of the following is a liability for the central bank?_______
(A) loans. (B) checkable deposits (C) bonds (D) currency. (E) saving accounts.
(6) Suppose a one-year discount bond o¤ers to pay $1000 in one year and currently has a 15% interest rate. Given this information, we know that the bond’ price must be:
s
Professor Yong Wang
10am-12pm, November 3, 2012
NAME
ID#
Instructions. There are three parts (12 pages) in this exam. Justify your answers in Part 2 and Part 3. Don’ panic even if you …nd some question di¢ cult; it may be di¢ cult for others t as well. Allocate your time wisely: answer the easy questions …rst and do not dwell on a single question for too long. An important way to please your grader is to write your answers neatly. No electronic devices (except calculators) can be used during the exam. Good luck!!
1. Choose the best alternative that completes the statement or answers the question [30 points]
(1) Suppose the consumption equation is represented by the following: C = 100 + :75YD .
The multiplier in this economy is _________
(A) 5 (B) 0.75 (C) 0.25
(D) 1.33 (E) 4.
(2) A …rm’ value added equals _________ s (A) its revenue minus its wages.
(B) its revenue minus its cost of intermediate goods.
(C) its revenue minus all of its costs.
(D) its revenue minus its wages and pro…t.
(E) none of the above.
(3)Suppose you are provided with the following data for your country for a particular month:
100 million people are working, 10 million are not working but are looking for work, and 20 million are not working and have given up looking for work. The o¢ cial unemployment rate for that month is___
(A) 7.7% (B)9.1%
(C) 23%
(D) 30% (E) 10%
(4) If nominal GDP rises from $1000 trillion to $1200 trillion, while the GDP de‡ ator rises from 2.0 to 2.2, the percentage change in real GDP is approximately equal to______
(A) 20%
(B) -9.1%
(C) 10%
(D)-10% (E)9.1%
(5) Which of the following is a liability for the central bank?_______
(A) loans. (B) checkable deposits (C) bonds (D) currency. (E) saving accounts.
(6) Suppose a one-year discount bond o¤ers to pay $1000 in one year and currently has a 15% interest rate. Given this information, we know that the bond’ price must be:
s