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Quiz6_answers - Econ*2410 F2011 Quiz 6a ECON*2410...

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Unformatted text preview: Econ*2410 F2011, Quiz 6a ECON*2410, Intermediate Macroeconomics Quiz #3, Fall 2011 . Your Name: ANSWE K3 ‘ ID Number: Please enter your answers in the following grid — get 2 points for doing so. There are 10 -- questions at 2 points each. Maximum score is 22 Question Answer Question Answer I I . a _ l ,._. l 1. Okun’s law is a relationship between the following variables (ut isthe unemployment rate and X tis real GDP at time t) (a) ut and-(XI: _ Xt=—1)/Xt_1 (ut “ lit—1) and (Xt _ Xt_1)/Xt_1 (c) (u: 4am) and (X: — XH) (d) (at — ut—1)/ut_1 and (X: — Xt—1)/thl. _._.._._.l...- i..... 4 4 4 I... ....I . ,.,4,4_44444444 a. _ Econ*2410 F2011, Quiz Ga 2. The ex ante real interest rate is the nominal interest rate: .minus expected inflation (b) minus actual inflation (0) plus expected inflation (d) plus actual inflation 3. The hypothesis that in the medium run interest rates rise one for one with inflation is known as: .the Fisher effect (b) Okun’s law (c) liquidity preference . (d) the Phillips curve 4. In 2010 Canada’s government budget deficit as a proportion of nominal GDP was approximately: (2012? 15m Economist merits Ck \oalounuz «A —4% .-3% 3m 20\\, h . n 68% Jim amnion r9131?“ to ii“? Midi 8° HQ. @4% ' \ou\\' (b) 5.3:“ la-z olméldaél 5. Order countries according to the interest rate they are currently paying on their 10 year government bonds (high to low): .Greece, Italy, Germany, Japan (b) Greece, Japan, Italy, Germany (c) Japan, Greece, Italy, Germany (d) Italy, Greece, Germany, Japan Econ*2410 F2011, Quiz 63 6. Order countries according to their debt to GDP ratios (high to 10W): Japan, Greece, Italy, Germany (13) Italy, Greece, Germany, Japan (c) Greece, Japan, Italy, Germany ((1) Greece, Italy, Germany, Japan 7. The aggregate supply curve (Chapter 10): ‘ (a) is horizontal since supply always equals whatever is demanded (b) shows the relationship between production and the expected price level (0 is unusual in that it can slope down to the. right @ shows the relationship between production and the actual price level S. The natural level of output: (b) "x‘sl‘Nq—ofi (1“ Powers om AS nominal wage workers demand @s the level of output produced when the actual and expected price levels are identical ((1) Increases when aggregate demand inoreases 9. When the price level is higher than expected: (a) production exceeds the natural output level (b) the unemployment rate is below the natural rate (c there is a movement along the AS curve, up to the right @au of the above 10. If the expected price level increases 5%: ’very point on the AS curve shifts up 5% -) every point on the AS curve shifts down by 5% (c) every point on the AS curve shifts up through the same vertical distance ((1) every point on the AS curve shifts down through the same vertical distance ...
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