# ECON105 - Eldar Sehic SFU 2009-3 ECON105 first exam(page 1...

• Notes
• affle123
• 5
• 100% (2) 2 out of 2 people found this document helpful

This preview shows pages 1–5. Sign up to view the full content.

This preview has intentionally blurred sections. Sign up to view the full version.

This preview has intentionally blurred sections. Sign up to view the full version.

This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Eldar Sehic SFU 2009-3 ECON105 first exam (page 1 of 5) 10 QUESTIONS, 3 MARKS EACH (1) Consider the TIMEI’OUTPUT graph. (a) Draw the graph and clearly label a recession. Ou‘ﬂ’u‘r MN’5'5‘“ 'T ‘ 2 X “r ‘ _}’/ o'/ ' "f'rmé (b) What variables can change the potential output of the economy? FAL‘TCJIQ Suﬁ-"LT ("W—'55,) ﬁnd) Tﬁtr‘rNocogj (PF-8 DAL-’N'IT‘f) (2) Imagine an economy where the peach farmer picks and sells \$600 of peaches to the yogurt factory and \$300 of peaches to another country. The milk factory sells \$800 of milk to the yogurt factory and \$500 of milk to consumers. The yogurt factory uses the peaches and milk to make yogurt, and sells \$2400 of yogurt to consumers and \$200 of yogurt to the government. (a) Measure the economy’s GDP by value-added. \fﬁ (RR) '2 Set: + 3m: C - t‘cc V'A(M.F.)= Eugiyﬁoec 7553:. s04} (Y.F.) ‘: Lam: + 1.3: w 6c: H 25;, -.: :2,” (ﬁlms! -_- Tomi. vn = ‘(av + .3"; + [1-1, = 3th”. (b) Measure the economy‘s GDP by expenditure. 43;:C+X+L‘+x_—%' :(C)+(c1)+(x) “i ('30:: + 1‘190)+(2.sp) + (300) : B‘foo Eldar Sehi'c SFU 2009-3 ECON105 first exam (page 2 of 5) (3} Using a completely labelled NSJNAF graph show what happens immediately when consumer optimism n‘ses. wNJ'LI(M£fL oﬂ‘FiNis‘z‘i '7- Frtom Co (I) n; (:(2)) (4) Consider a small economy that produces only goods X and Y. The price of good X was \$1 in 2005, \$3 in 2006, and \$2 in 2007. The price of good Y was \$4 in 2005, \$6 in 2006, and \$4 in 2007. The quantity of good X was 10 in 2005, 5 in 2006, and 5 in 2007. The quantity of good Y was 5 in 2005, 5 in 2006, and 10 in 2007. Let 2007 be the base year. Calculate the inflation rate from 2005 to 2006. .._. p 7-r _ 3" .) Cr ‘7, ll” 4(lm335: cf ‘19 ‘7 P i _ 7 g - as ' ‘——— "‘ ﬁlmy—{So “n; 5(- Nmmm 4D? (v; ‘. -- “PM fKory £5775 ._ ’3‘..M ‘22-»;- ‘i'b 2:161 '7 v.5 =1‘r04 “ii-cf”: 3v 1? " .- Hr) LJIaq,-'5"‘§+(Jitsr‘i'S' 7/{Off'zc‘,/— “It. Vas- Pg; 143m :79 up»: 1.79.7 PIT-(CC! _' _ ’5-5-35— H?) fps—t'ZXto+~1x5—:Lro 1? r) YGC'TILY'F 1‘5’ : 35 1'.” (00 y_ Eldar Sehic SFU 2009-3 ECON105 first exam (page 3 of 5) (5) Using a completely labelled LEAKAGESIINJECTIONS graph, show the immediate effect on the economy if the relative international price rises. ,.'j:-- ’/-a—-.t gt: — W mm mm mm 1/ &%’_I {Uri-1‘) W MI ,1, ML I 964 ACTI» i S i f e” -- —— —-———_._—--5£xx,~¢ : {'bKt'tJ'f'J-Hr , tea-151671765; _ ____ \$11.71;: /'~6(/-é).t-Hl fh’cetf‘lor-(Jz L Fo"“lo+ V‘" 4—. w {n+qe+{c' INJécTivHSf _ ,7 (6) Imagine an economy with no government, such that autonomous consumption is \$65, autonomous investment is \$10, and autonomous exports are 525. Also, the marginal propensity to consume is 95%, and the marginal pmpensity to import is 5%. (a) Find the equilibrium income. C t r 4- X "H H ﬁ£1C+iiL{+X-M A #— :cg+i'94‘q;+{s+{U'43‘M3‘7' -' “‘7 =Co+fa+xu+[b-m:7 {30‘0‘571'7' (hi -: 65+ m+zy1 [c.9r-c.cr]-{ r" \f : (CCU. (b) If autonomous exports decrease by 510, what will be the new equilibrium income? 60¢ 8‘! ’0 (5”er "‘ "°) --—‘-) HSirvﬁ Men: mi: M I ‘FG4—c-‘I 7r 7?) 9° "’"C’YT‘? '3) YHi-u : we, .7 uswq swam/E Hmw’ue-t (1c): a, :4- :m s *“r ....- , ‘?-'_ l" "’ “’ A2»; A9 :(’c)("’c) = -ro‘o 'Ym 7 ’000'lﬁo _ ﬁve: (c) What marginal propensity to spend will give this new equilibrium income, from part (bi, if autonomous exports remain at \$25? Ava—:7 1920+ 2—1 '—' T ’00 + 1' (qcc‘) 1‘ 930 1) gm” ‘2 “2 trot. : 8:49 _2 : 8cm ‘icm ' 7 Eldar Sehi'c SFU 2009-3 ECON105 first exam (page 4 of 5) (7) Assume the economy is currently in a recessionary gap. (a) Show using an ADXASILRAS graph what will happen if the government's long-run solution is used? {7 M45 (b) What is an advantage of using the government's long»run solution in a recessionary gap? Mr:va PCSSI'GLC: ANS-wees .' F451”: '5 ti 71’4"“ MG“: Yd FWC‘W-‘WMMJ', H: QB”. H“.M478€ (Lava-E Pubcr( Jealuncﬂ .._A, (c) What is a disadvantage of using the government's long-run solution in a recessionary gap? Mair“? PHSHTLJE xii-riﬂed .' FT. Hurt-r) Trees-‘5 kw“? J’7V’N‘55; #1443 Pravda-6 ﬁf’t’Nt-H‘v‘ﬁr (8) Imagine an economy at its potential with an equilibrium output of \$400. Then there is an increase in investment of \$50. The immediate effect is that equilibrium output becomes \$550. The short-run effect is that equilibrium output becomes \$500. (a) Calculate the simple multiplier. A_ thin-1t an 1-43 L; 5—5.5 L_ Lt u _ ‘ StMpLQ chrru'uii‘,a_ -:_ ‘1{ J) : " : rim : Aﬂ-ép (EMA, Indra-q: 1,7) goo SL (b) Calculate the multiplier. A; (-JH—C‘T'ILH”) ,u “0 " “(50 [0'19 Mmtfrpciera : ._________—— _ ‘___ : ____ _. L Alkéo(tf"lr"ld-9-ﬂ_f7) 5b 513 (c) What long—run solution will return the economy to the old price level? bﬁcitche Sf’éM'pzm 9 Eldar Sehic SFU 2009-3 ECON105 first exam (page 5 of 5) (9) Assume the economy is initially at its potential. Then the government increases the marginal propensity to tax. (a) Using a completely labelled AD/ASKLRAS graph, show what happens immediately and in short—run? M45 A f (b) What happens to exports in short-run? mealtime (K0?) mum: Fug. (10) Imagine the economy's GDP is 560. Its factor supply is 20, and its productivity is 54. If productivity becomes \$5, while other variables remain the same, what will be the new GDP? Explain using the GDP breakdown. 42>? = es : (Ml-EM) R p l ) r: '11ch Lg‘rrcnzri'rwzv Mrﬁ ) —— mew-:3 (Lc)(O-?-5") (‘5) t is ...
View Full Document

{[ snackBarMessage ]}

### What students are saying

• As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

Kiran Temple University Fox School of Business ‘17, Course Hero Intern

• I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

Dana University of Pennsylvania ‘17, Course Hero Intern

• The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

Jill Tulane University ‘16, Course Hero Intern