midterm2 - ECON1002 Selected Midterm Questions Important...

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Unformatted text preview: ECON1002 Selected Midterm Questions Important NOTES (page 1 of 2) • These 9 questions were selected from Class A and B’s papers. They deserve attentions as they are identified as the worst attempted questions. • Solutions to these questions will be uploaded to tutorial website in due course. • The question papers will be kept as confidential. However, if you want to take a look at it (and your scantron answer sheet as well), you are allowed to visit moyin at her office hours. 4 Nov (Tue): 4:15-6:00pm 5 Nov (Wed): 1:15-3:00pm 6 Nov (Thur): 10:30-12:30noon; 4-5pm, Or, by mutually agreed appointments. Important NOTES (page 2 of 2) • Results will be posted on tutorial website 4 Nov. • Due to privacy concern, I will just post your U-No (with the last digit omitted) and your mark on the tutorial website, other personal information will NOT be included. • However, if you do mind about the above arrangement and DO NOT want your mark to be disclosed on the tutorial website, please email Moyin ON OR BEFORE (31 Oct, Friday). I will omit your U-No and mark from the list and inform you personally via email. (HKU account only!) • Moyin’s email: [email protected] Q1 Over any specified period, which of the following statements gives the most complete picture of an economy’s structure: a) total production = planned total expenditure = GDP b) total production = total income = GDP c) total production = total income = planned total expenditure d) total production = total income = actual total expenditure ANS: D • A&C refers to equilibrium conditions in SR AE model (Ch. 11) (Equi: planned AE= total prod) • Remember, it may OR may not be realized in reality! • In the reality, at any moment of time, unexpected changes in inventories may occur, so A&C are not correct. • B&D are more appropriate statements in describing the economy. • As explained in the circular flow model: • Total prod = total income = ACTUAL total expenditure, and they all equal to GDP • GDP is just a figure/estimate in assessing a country’s total worth of production within a specified period of time • D is a better answer than B because it FULLY describes the structure of the circular flow model, i.e. the economy Q2 Given the following consumption schedule, find out the Marginal Propensity to Save (MPS) out of disposable income....
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This note was uploaded on 04/22/2010 for the course ECONOMICS ECON1002 taught by Professor None during the Spring '10 term at Hong Kong Institute of Vocational Education.

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midterm2 - ECON1002 Selected Midterm Questions Important...

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