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CECN204 Distance Course Spring/Summer 2009
Assignment Details
REQUIRED ASSIGNMENTS
There will be two assignments in lieu of the usual midterm exams.
The final exam
will be comprehensive and cover the full content in the course outline.
Your
assignments are to be submitted via the Assignments Drop box.
Once received, they
will be marked within a week and then returned to you with your marks and instructor
comments.
The final exam will be of a comprehensive nature, covering all chapters taught.
Assignment 2 Details
(Covers Week 410)
Please make sure that you explain all steps in arriving at your answers to the following
questions from your text.
All calculations should be done by hand.
You can use Excel or Lotus
123 spreadsheets to verify your answers.
Your marks will be weighted on the basis of your reasoning more than the exact numerical
answer itself.
1.
{15 marks} Suppose that Canadians spend 80% of their income (GDP) on
consumption, and the minimum level of consumption for basic necessities (even if the income is
zero) is $200 billion. Answer the questions.
a.Construct the consumption and savings functions such as C=a+bY and S=YC, where
C=consumption and Y=Income (GDP) and show them graphically.
b.Identify the equilibrium GDP.
c.Compute and explain MPC and MPS.
d.Compute the multiplier.
e.If investment spending of $20 billion is added in the system, how much will the GDP rise?
2.
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This note was uploaded on 12/13/2010 for the course X X taught by Professor X during the Spring '10 term at Ryerson.
 Spring '10
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