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# Principles of Macroeconomics: A Study Guide

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Unformatted text preview: {S} If we use a ﬁxed-weight procedure and year 2 as the base year, then real GDP in year 3 {RGDPSIZ} is equal to: (a) 1650 (13) 231111 (e) 2941} (d) 1960 [6) If we use a ﬁxed-weight procedure and year 3 as the base year, then real GDP in year 2 [RGDPZIM is equal to: (a) 2520 (b) 1961} {c} 1993 (d)lsso (T) if we use a ﬁxed—weight procedure and year 3 as the base year, then real GDP in year 3 (RGDP3F3) is equal to: {a} 11351} (b) 1994 (c) 2311-11 (d) 3451} (8} Using the chain-weighted method, the inter-annual growth rate of RGDP between year 1 and year 2 is equal to: {a} 15% (h) —1 1.113% (c) 41.09%. (d) —1 4.29% (9) Using the chain-weighted method, the inter—annual growth rate of RGDP between year 2 and year 3 is equal to: (a) 25% (bjzoas (c) 315.90% (d) None of the above {111) Using the chain-weighted method, the annual value of RGDP of year 1 in chained dollars of year 2 is equal to: {a} 1993 (h)lsso {eizsoo {d} None of the above END H. EXERCISE {25 min.) Given the following information about the Labor market in The Wet Republic of Rainland. in absolute values: W Tan (3):: k Tun (ﬂ}=[l.1]Tan is) {The graph is not drawn at scale] a) What is the value of a 'i‘ [l min.) - * I, . (“bird «1; ‘5‘ " l b} Determine the particular equations of the demand for labor and the supply of labor {5 min.) c] Dean-mine the equilibrium level of employment {‘N‘} and the equilibrium wage (W') {3 min.) {1) What would happen to both N' and W” if the enhepreneurs forecast a remission in the near future in Rahilanrl? Provide a Formal mathematical statement and a graphical explanation to support your answer [3 min.) e) What would happen if the government of Rainland sets a. minimum wage ot'\$ lﬂﬂ? Provide intuitive, numerical, and graphical explanations {15 min.) I] Assume that the government erroneously has set a ‘hninirnum wage“ below the equilibrium wage. W“, and this ﬁxed wage level causes and difference between the demand for labor and the supply of' labor. lfsueh a difference is equal to it] units of labor, how much was the value of the incorrect minimum wage? {4 min}. Why do we say that this is an incorrect “minimum wage"? {3 points} ...
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• Fall '02
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