ECON7021: The Macroeconomy Sample mid-semester exam paper
Note: The questions provided in this sample simply give you an idea how the exam paper looks
like. They do not necessarily reflect the focused topics or contents of the true exam paper!
Part A Mult
Tutorial 1
Question 1
A farmer grows a bushel of wheat and sells it to a miller for $1.00. The miller turns the wheat
into flour and then sells the flour to a baker for $3.00. The baker uses the flour to make bread
and sells the bread to an engineer for $
Tutorial 5
Question 1
What are the various ways in which the Central Bank can influence the money supply?
Question 2
Why might a banking crisis lead to a fall in the money supply?
Question 3
An economy has a monetary base of 1,000 $1 bills. Calculate the
ECON7020 Practising MCQs 12
1. Economists who view the economy as inherently unstable generally argue that:
A) stabilization policy is too dangerous to be used.
B) the economy should be stimulated when it is depressed and slowed when it is
overheated.
C)
4/9/2014
This lecture
ECON7020
The Macroeconomy
accounting identities for the open economy
the small open economy model
what makes it small
how the trade balance and exchange rate are
determined
how policies affect trade balance & exchange
rate
Lecture 7
1/04/2014
This lecture
ECON7020
The Macroeconomy
The classical theory of inflation
causes
effects
social costs
Classical assumes prices are flexible &
markets clear
Lecture 6
Applies to the long run
Text treatment: Mankiw 8th edition,
Ch. 5
0
The quantity
3/11/2014
This lecture
ECON7020
The Macroeconomy
the closed economy Solow-Swan model
how a countrys standard of living depends on its
saving and population growth rates
how to use the Golden Rule to find the optimal
saving rate and capital stock
Lecture 3
3/4/2014
This lecture
ECON7020
The Macroeconomy
modeling the macroeconomy
what determines the economys total
output/income
how the prices of the factors of production are
determined
Lecture 2
how total income is distributed
Text treatment: Mankiw 8th edit
25/03/2014
This lecture
ECON7020
The Macroeconomy
the definition, functions, and types of money
how banks create money
what a central bank is and how it controls the
money supply
Lecture 5
Text treatment: Mankiw 8th edition,
Ch. 4
0
Money: Definition
1
Mo
26/02/2014
This lecture
ECON7020
The Macroeconomy
about the issues macroeconomists study
the tools macroeconomists use
some important concepts in macroeconomic
analysis
Lecture 1
Text treatment: Mankiw 8th edition,
Ch. 1-2
0
Important issues in macroecono
19/03/2014
This lecture
ECON7020
The Macroeconomy
incorporates technological progress in the
Solow-Swan model
about policies to promote growth
about growth empirics: confronting the theory
with facts
Lecture 4
two simple models in which the rate of
techno
1- Differential calculus
1
the cost function, the above equation is just a mathematical representation of the process
of obtaining the marginal cost.
Differentiation rules
We use the following notation: a and b are constants, and f ( x) , g ( x) , and h(
Univariate differentiation
Concerned with measuring the rate of
change of one variable in response to a
change in another variable.
Finding the slope of a function at a point
Slope of tangent to function at the point
Can only be done if the function i
29/04/2014
This lecture
ECON7020
The Macroeconomy
facts about the business cycle
how the short run differs from the long run
an introduction to aggregate demand
an introduction to aggregate supply in the short
run and long run
Lecture 8
how the model of a
6/05/2014
This lecture
ECON7020
The Macroeconomy
develops the IS-LM model,
the basis of the aggregate demand curve.
focuses on the short run and assume the price
level is fixed (so, SRAS curve is horizontal).
Lecture 9
focuses on the closed-economy case.
Tutorial 3
Question 1
Why might an economic policymaker choose the Golden Rule level of capital?
Question 2
In the Solow-Swan model, how does the rate of population growth affect the steady-state level
of income? How does it affect the steady-state rate o
Tutorial 2
Question 1
Consider an economy with the following equations:
Y=C+I+G
Y = 5000
G = 1000
T = 1000
C = 250 + 0.75 (Y T)
I = 1000 50r
where r denotes the interest rate (measured as percentage
points, for example r 5 means that the interest rate is
ECON7020: Macroeconomics for Business Mid-Semester Examination, Semester 1, 2011
Part A Multiple Choice Questions
Answer ALL 15 Questions in Part A on the MCQ Answer Sheet provided
Part A is worth 15 marks
Choose the best answer for each of the following
ECON7020: Macroeconomics for Business Final Examination, Semester 2, 2011
Part A Answer all questions (20 marks)
Choose the best answer for each of the following questions:
Question 1
In the small open economy in equilibrium:
A) saving is fixed and invest
ECON7020: Macroeconomics for Business Final Examination, Semester 1, 2011
Part A Answer all questions (20 marks)
Choose the best answer for each of the following questions:
Question 1
If domestic spending exceeds output, we _ the difference net exports ar
26/05/2014
This lecture
ECON7020
The Macroeconomy
We will look at two policy debates:
1. Should policy be active or passive?
2. Should policy be by rule or discretion?
Lecture 12
Text treatment: Mankiw 8th edition,
Ch. 18
0
1
Growth rate of U.S. real GDP
12/05/2014
This lecture
ECON7020
The Macroeconomy
uses the IS-LM model to analyse the effects of
shocks, fiscal & monetary policy.
derives the AD curve from the IS-LM model
goes through several theories about what caused
the Great Depression
Lecture 10
Te
21/05/2014
This lecture
ECON7020
The Macroeconomy
the Mundell-Fleming model
(IS-LM for the small open economy)
causes and effects of interest rate differentials
arguments for fixed vs. floating exchange rates
Lecture 11
how to derive the aggregate demand
ECON7020 Practising MCQs 11
1. Compared to a closed economy, an open economy is one that:
A) allows the exchange rate to float.
B) fixes the exchange rate.
C) trades with other countries.
D) does not trade with other countries.
2. In the MundellFleming mo
ECON7020 Practising MCQs 10
1. In the ISLM model when government spending rises, in short-run equilibrium, in the
usual case the interest rate _ and output _.
A) rises; falls
B) rises; rises
C) falls; rises
D) falls; falls
2. In the ISLM model when taxati
Tutorial 7
Question 1
If Japan has low inflation and Mexico has high inflation, what will happen to the exchange
rate between the Japanese yen and the Mexican peso?
Question 2
Consider an economy with the following equations:
Y = C + I + G + NX
Y = 5000
G
Tutorial 2
Question 1
Consider an economy with the following equations:
Y=C+I+G
Y = 5000
G = 1000
T = 1000
C = 250 + 0.75 (Y T)
I = 1000 50r
where r denotes the interest rate (measured as percentage
points, for example r 5 means that the interest rate is
Tutorial 10
Question 1
According to the IS-LM model, what happens to the interest rate, income, consumption, and
investment under the following circumstances?
a) The central bank increases the money supply.
b) The government increases government purchases
Tutorial 4 (Assessable)
Please note that this tutorial is assessable. The test will be conducted during your normal
tutorial times. During 15 minutes of your allocated time, you will be asked to answer 10
multiple choice questions and a couple of small sh
Tutorial 6
Question 1
Write the quantity theory of money equation and explain its meaning.
Question 2
If inflation rises from 6 to 8%, what happens to real and nominal interest rates according to
the Fisher effect?
Question 3
You are advising a small coun