test1_solution - University of Toronto 1)- (Total 18...

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University of Toronto Macroeconomic Theory & Policy (ECO202Y1) Masoud Anjomshoa 1)- (Total 18 points) a)- (2 points each) - Participation rate: Share of civilian population with age 15 and older out of Labor force. High-power money: The money which is put in circulation directly by the Central Bank. It is equal to the value of liabilities or assets of the Central Bank. Bank Rate: The interest rate that the Central Bank charges the commercial banks for overnight loans. Operating Band : A 0.5% range below the Bank Rate. Overnight Rate: The interest rate that the commercial banks charge each other for overnight loans. Capital goods: Goods whose services are used for a long period of time in production of other goods, like trucks, airplanes, buildings, … Intermediate goods: Goods that are used up and disappear in production of other goods, like fuel, water, wood, any kind of raw materials, … Value added: Total value of the output minus value of used intermediate goods Potential output: The level of output when all resources (production factors) are fully employed. ============================================================== 2)- (Total 10 points) Labor force = civil population – out of labor force = 68 – 4 – 15 – 11 = 38 million (3 points)
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test1_solution - University of Toronto 1)- (Total 18...

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