Econ Homework Multiple Choice
1. All of the following would shift the LRAS curve to the right EXCEPT
A. An increase in the size of the labor force
B. A net inflow of human capital
C. An increase in the overall price level
D. An improvement in technology
2
Econ Homework Questions
Spike in Oil Prices
A. Suppose there is a temporary, but significant, increase in oil prices in an
economy with an upward sloping SRAS curve. When such a steep supply shock
hits the macro economy (and it did happen in the 1970s), h
1.
C = CA + MPC*Yd
Yd = Y  T
PE = Y at equilibrium
PE = C + I + G (closed economy)
CA = 200
MPC = .8
I = 250
G = 300
T = 100
Solve for Y*
Since PE = Y,
Y=C+I+G
Y* = 3350 (we did this in class, but it wouldn't hurt to go through it again for practice)
2.
Percy Patrick Diiorio
ECO 126 Fall 2013 BLS.gov assignment.
1. On the BLS.gov site find definitions for U3 and U6 measures of unemployment. How are they
different? If you were a policy maker, which would you give the most weight? Why? What is the
U3 rate,
ECO 126 Fall 2013
Exam 3 review sheet
The exam covers Chapters 15 and 16, all homeworks, lectures, since exam #2.
Chapter 15: Money, Banking and Central Banking
Definitions:
Money
three functions of money:
medium of exchange
unit of accounting
store of v
Solutions to Chapter 15 problems
154
M1 = 2200
M2 = 9700
155
M1 = 2100
M2 = 10,700
156
A. Neither
B. M2
C. M1 and M2
D. M2
157
A. M1 and M2
B. Neither
C. M2
D. M1 and M2
E. M2
1515
9.09
1516
.85 million
1517
.25
1518
decrease by 5 billion
1519
mu
ECO 126 Fall 2013
Review sheet for exam #1
The exam will cover the following, among other topics. This is not exhaustiveyou are
responsible for all readings, class lectures, films etc.
Miller Chapter 7
Heilbroner and Milberg Chapters 1, 4, 5 and 6 (Bla
Unemployment Homework Econ
1. The unemployment rate reported last Friday (11/8/13) is _7.3_%.
2. The annualized rate of growth of US GDP for the third quarter, reported last
Thursday (11/7/13) is equal to _2.8_%.
3. What is U3 unemployment?
In the United
Econ HW Aggregate Supply/Demand
1. Name two of the determinants of Aggregate Demand.
Interest rates
Price level
2. Define a recessionary gap. Think of the modern Keynesian short run Aggregate
Supply.

A recessionary gap is a term used in economics when a
Econ HW
Professor Reinhauer
In the real world, taxes are composed of a base T and a marginal rate t. The marginal
rate is a function of income.
T = T + tY
1. Given the following planned spending function,
PE= C + I + G (ignoring net exports)
C = 250 + .9
Percy Patrick Diiorio
ECO 126 Fall 2013BLS.gov assignment.
1. On the BLS.gov site find definitions for U3 and U6 measures of unemployment. How are they
different? If you were a policy maker, which would you give the most weight? Why? What is the
U3 rate,
1.
C = CA + MPC*Yd
Yd = Y  T
PE = Y at equilibrium
PE = C + I + G (closed economy)
CA= 200
MPC = .8
I = 250
G = 300
T = 100
Solve for Y*
Since PE = Y,
Y=C+I+G
Y*= 3350 (we did this in class, but it wouldn't hurt to go through it again for practice)
2. 'B
1. Patrick Percy Diiorio Econ Policy HW
Interest on Required Reserve Balances and Excess Balances
Currently the Federal Reserve is paying interest on both required and excess reserves. It
promotes efficiency in the banking sector because it eliminates the
Complete problems 154 to 157 and 1515 to 1519. M1 and M2 problems will be on the
exam so you must know them by practicing them.
154
M1 = 2200
M2 = 9700
155
M1 = 2100
M2 = 10,700
156
A. Neither
B. M2
C. M1 and M2
D. M2
157
A. M1 and M2
B. Neither
C
ECO 126 Fall 2013
Review sheet for exam #1
The exam will cover the following, among other topics. This is not exhaustiveyou are
responsible for all readings, class lectures, films etc.
Miller Chapter 7
Heilbroner and Milberg Chapters 1, 4, 5 and 6 (Bla