Midterm 1 answer key

Midterm 1 answer key - NAME(IN BLOCK LETTERS Econ 1110...

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NAME (IN BLOCK LETTERS): ___________________________________________________________ Econ 1110, First Midterm Examination PLEASE READ THE FOLLOWING DIRECTIONS CAREFULLY. 1. Altogether there are 6 pages (including this page). When the examination begins, check immediately to make sure that you have all pages. 2. Please PRINT your name LEGIBLY - IN BLOCK LETTERS - at the top of EVERY PAGE immediately after the exam begins. 3. Answer all questions concisely in the space provided. If you need additional space to answer a question, please use the back of the page on which the question is typed. In that case, please indicate clearly on the front of the page that part of the answer is on the back of the page. 5. You do not need to explain your answer for QUESTION II of this exam (Multiple Choice). Just choose one of the options given. 6. For the rest of the exam, only short answers are required. However, you MUST give at least a BRIEF EXPLANATION of your answers. NO CREDIT will be given without a brief explanation! 7. You are allowed a SINGLE “cheat sheet” for this exam. You may fill BOTH SIDES of that cheat sheet. You may use a calculator, but you may NOT use a computer. 8. When time is called at the end of the examination, you must stop writing immediately. 9. Grading : This examination contains 4 equally weighted questions. Each question contains several parts. The number of potential points is indicated next to each question. There are 100 points possible. Good luck! QUESTION I: National Accounting (25 Points) The left side of the table below provides values for 9 variables in an economy. Fill in the data for the 6 variables on the right side of the table. Please make sure you show how you calculate your answers. Consumption 70 Net Factor Payments 5 GDP 100 Net Exports 10 GNP 105 Government Saving -5 Government Purchases 10 Private Saving 30 Investment 10 Current Account 15 Taxes 20 Net Acquisition of Foreign Assets 15 Transfers 10 Interest Payments on Government's Debt 5 Econ 1110, Spring 2008, Midterm 1 Professor Ted Temzelides Page 1
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NAME (IN BLOCK LETTERS): ___________________________________________________________ Since GNP=GDP+NFP, NFP=5. Rewrite GDP=C+I+G+NX as NX=GDP-(C+I+G )=100-(70+10+10)=10 Government saving is given as T-TR-INT-G=20-10-5-10=-5 Private saving is GNP-T+TR+INT-C=105-20+10+5-70=30 Current account is S-I=NX+NFP=15 Net acquisition of foreign assets=Current account QUESTION II: Multiple Choice Questions (25 Points) 1. (5 Points) The Scandinavian experience with unemployment suggests that (circle one answer) a. Social Protection is the source of European unemployment, because Scandinavian countries have very high unemployment rates. b.
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Midterm 1 answer key - NAME(IN BLOCK LETTERS Econ 1110...

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