MACRO FINAL 04 final

# MACRO FINAL 04 final - THE UNIVERSITY OF NEW SOUTH WALES...

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THE UNIVERSITY OF NEW SOUTH WALES SCHOOL OF ECONOMICS SESSION 2, 2004 ECON1102 MACROECONOMICS 1 FINAL EXAMINATION Time allowed: TWO (2) hours This paper is worth 60% of the total mark in this course This paper has two parts: PART A: 15% - 15 Multiple Choice Questions Answer ALL Questions from this part on the answer sheet provided. There is only one correct response to each question. PART B: 45% - 5 Questions Answer THREE (3) Questions from this part ANSWER EACH QUESTION IN PART B IN A SEPARATE BOOK Multiple choice questions must be coded in pencil. All answers to Part B must be written in ink. In Part B pencils may be used for drawing, sketching or graphical work. This paper may not be retained by the Candidate

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PART A This part is worth 15 marks Answer ALL questions on the answer sheet provided There is only one correct response to each question Question 1 Which of the following is not a component of the money base? (a) Deposits of banks with the Reserve Bank. (b) Deposits of government with the Reserve Bank. (c) Reserve Bank liabilities to the private sector. (d) Holding of currency by the private sector. Question 2 If banks seek to maintain a reserve ratio of 20%, a new cash deposit of \$400 will cause banks to expand their lending by (a) \$80. (b) \$2,000. (c) \$400. (d) \$1,600. Question 3 The government wants to increase equilibrium real GDP by \$50 billion. If the government expenditure multiplier is 2.5 and the marginal propensity to consume is 0.8, the increase in transfer payments required is (a) \$20 billion. (b) \$25 billion. (c) \$10 billion. (d) none of the above. Turn over page 2
Question 4 According to purchasing power parity, if a computer sells for \$5,000 in Australia and 15,000 yuan in China, the nominal exchange rate, expressed in dollars per yuan, is (a) 3 (b) 0.33 (c) 1.5 (d) none of the above Question 5 The following data relate to the Balance of Payments for a particular year Exports of goods and services \$180 billion Imports of goods and services \$182 billion Net income from overseas -\$122 billion Foreign investment in Australia \$60 billion Current transfers \$10 billion Capital account \$20 billion On the basis of this data (a) the capital and financial account surplus is \$114 billion. (b) the current account deficit is \$124 billion.

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## This note was uploaded on 01/31/2012 for the course ECON econ taught by Professor A during the Three '11 term at University of New South Wales.

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MACRO FINAL 04 final - THE UNIVERSITY OF NEW SOUTH WALES...

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