Problem Set 2K F2010

# Problem Set 2K F2010 - Problem Set 2K F2010 1. On the 450...

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Problem Set 2K F2010 1. On the 45 0 diagram, in the short run an upward shift of the consumption function causes net exports to a. fall. b. rise. [an upward shift of the consumption function: a downward shift of the consumption function, an upward shift of the investment line, a downward shift of the investment line, an upward shift of the government purchases line] (A: B, A, B, A) 2. An economy is fully described by the following equations: C = 1.8 + 0.5Y I = 0.2Y G = 1.7 NX = 1.5 - 0.2Y For this economy the vertical intercept of the aggregate expenditure line is a. 4.0 or less. b. at least 4.0 but less than 5.0. c. at least 5.0 but less than 6.0. d. at least 6.0 but less than 7.0. e. 7.0 or more. [G=1.7: 0.9, 2.1, 3.1, 0.7] (5.0: 4.2, 5.4, 6.4, 4.0) 3. An economy is fully described by the following equations: C = 1.8 + 0.5Y I = 1.0 + 0.1Y G = 1.7 NX = 1.5 - 0.2Y In this economy, the slope of the aggregate expenditure line is a. 0.4. b. 0.5. c. 0.6. d. 0.7. e. 0.8. [0.5: 0.6, 0.7, 0.9, 0.8] (0.4: 0.5, 0.6, 0.8, 0.7) 1

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4. An economy is fully described by the following equations: C = 1.5 + 0.5Y I = 0.8 + 0.2Y G = 2.0 NX = 1.5 - 0.2Y At equilibrium GDP a. there is a trade deficit. b. trade is balanced. c. there is a trade surplus. [NX = 1.5 – 0.2Y: NX = 1.5 – 0.1Y, NX = 3.0 – 0.1Y, NX = 3.0 – 0.2Y, NX = 1.0 – 0.1Y] (deficit: surplus, surplus, surplus, deficit) 5. An economy is fully described by the following equations: C = 0.5 + 0.7Y I = 1.0 + 0.2Y G = 1.7 NX = 1.5 - 0.2Y In this economy, the consumption function is a. flatter than the aggregate expenditure line. b. parallel to the aggregate expenditure line. c. steeper than the aggregate expenditure line.
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## This note was uploaded on 02/17/2012 for the course ECO 2013 taught by Professor Denslow during the Fall '05 term at University of Florida.

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Problem Set 2K F2010 - Problem Set 2K F2010 1. On the 450...

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