203-final-winter-2009-answers-POST

203-final-winter-2009-answers-POST - Concordia University...

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Concordia University Department of Economics ECON 203 – INTRODUCTION TO MACROECONOMICS Winter 2009 COMMON FINAL EXAMINATION VERSION 1 AND ANSWERS STUDENT NAME: _____________________________________________________ STUDENT NUMBER: __________________________________________________ Please read all instructions carefully. 1. This is a three-hour exam (180 minutes). The questions are worth 150 marks altogether. It is a good strategy to spend one minute per mark for your answers (150 minutes) and spend the remaining time (30 minutes) to review your answers. 2. The exam has 14 pages and it consists of four parts: (i) Part I: 25 multiple-choice questions (25 marks); (ii) Part II: Choose 5 out of 7 “true-false” questions (25 marks); (iii) Part III: Choose 4 out of 5 long questions (60 marks), and (iv) Part IV: One “current events” question (40 marks). 3. Write your answers for the multiple-choice questions on the computer scan-sheet with a pencil . For Parts II to IV, write all your answers on this exam. Do not use additional booklets. 4. You are allowed to use a non-programmable calculator. You may use either pen or pencil to provide your answers for Parts II to IV. Grades: Part I: __________ Part II: __________ Part III: __________ Part IV: __________ Total:
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Part I: Twenty-five (25) Multiple Choice Questions. Write all answers on the computer sheet provided. Please use a PENCIL (Total=25 marks). 1. If taxes depend on income, then the size of the government expenditure multiplier__ it would be if taxes were a constant. a. could be either larger than or smaller than b. is larger than c. is equal to what d. is smaller than e. none of the above. 2. Which of the following is FALSE? a. The bigger the multiplier, the higher the impact of a change in any autonomous variable on equilibrium output. b. A discouraged worker is no longer in the labour force. c. Unanticipated inflation benefits borrowers. d. For a given nominal interest rate, the real interest rate is lower when there is a low inflation rate. e. The marginal tax rate has a negative effect on the multiplier. 3. If an economy is heading towards a recession and if the authorities want to minimize the drop in real GDP, they should a. Decrease taxes and decrease money supply. b. Increase government expenditure and decrease money supply. c. Decrease taxes and increase money supply. d. Decrease government expenditure and increase money supply. e. None of the above. 4. Suppose consumption (C) is $30,000 when income is $32,000, and the marginal propensity to save (MPS) is 0.25. An increase in income causes C to rise to $36,000. What is the new income? a. $24,500 b. $35,000 c. $40,000 d. $42,500 e. None of the above. 5.
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203-final-winter-2009-answers-POST - Concordia University...

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