Problem+Set+_4+_Fall+2011_

# Problem+Set+_4+_Fall+2011_ - Name SID GSI Econ 100B...

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Name: ____________________________ SID : ____________________________ GSI: ____________________________ Econ 100B Macroeconomic Analysis Professor Steven Wood Fall 2011 Problem Set #4 Due: November 1, 2011 (in class before 3:50:01 p.m.) Place your completed problem set in the box near the entrance. Please sign the following oath: The answers on this problem set are entirely my own work. I neither copied from the work of others nor allowed others to copy from my work. _______________________________________ Signature Any problem set turned in without a signature will be assigned a grade of zero. Problem Set Instructions 1. You MUST complete your problem set on this template. 2. Graphs and equations MAY be drawn by hand. When drawing diagrams, clearly and accurately label all axis, lines, curves, and equilibrium points. 3. Explanations MUST be word-processed. Your explanations should be succinct and to the point. Problem Set #4 (Fall 2011) 1/5

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A. Multiple Choice Questions (15 points) . Circle the letter corresponding to the best answer (3 points each). 1. Suppose that both China and Japan have net export functions that can be written as NX = NX – α*Y + β*Y F – γ*r where Y F is foreign economic activity. If both China and Japan are initially in general equilibrium and the Chinese government then engages in an expansionary fiscal policy, in the short-run Japan will experience: a. Higher economic output and higher inflation. b. Higher economic output but lower inflation. c. Lower economic output but higher inflation. d. Lower economic output and lower inflation.
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