PROBLEM SET FOR CH 11 Suggested Solutions December 9, 2004
1. See textbook and lecture notes.
2 BJM Q 11.1 a. True. See the introduction to Ch 11 in the text. b. False. The original Phillips curve broke down in the 1970s when most OECD countries experienc
ECO202: Solutions to Quiz #3
1. (5 points) Read the statements below carefully. Decide whether the underlined statement is true, false
or uncertain and explain the arguments for your answer. Answers without an explanation will not
receive credit. If the a
ECO202: Solutions to Test 4
1. (20 points total) The Bank of England is concerned that their inflation rate is too low and
wants to permanently raise the current inflation rate by 9 percentage points. The economy is
currently (period 0) at a medium-run eq
ECO202: Quiz 2 Solutions
1. (5 points) Read the statements below carefully. The first few sentences provide information
to you about the scenario it is true. Decide whether the underlined statement is true, false or
uncertain and explain the arguments for
ECO202: Solutions to Quiz #4
1. (5 points) Read the statements below carefully. Decide whether the underlined statement is true, false
or uncertain and explain the arguments for your answer. Answers without an explanation will not
receive credit. If the a
ECO202: Solutions to Quiz 1
*Note: the solutions provided here are very detailed because I want you to learn from the
solutions if you didnt answer the question correctly. This is not the amount of information Im
looking for when marking your quizzes.
1.
ECO202: Solutions to Term Test 3
Extra Credit:
1. The last time Canada pegged the CA Dollar to the US Dollar was:
A. 1841 1858
B. 1860 1871
C. 1949 1950
D. 1962 1970
2. Canadas unemployment rate in December 2013 was:
A. 8.9%
B. 7.2%
C. 6.4%
D. 5.3%
3. The
ECO202: Solutions to Term Test 2
Please circle the letter to indicate your answer. Wrong answers will not affect your test.
1. As of 2013, Canada is currently running a:
A. trade balance
B. trade deficit
C. trade balance
D. none of the above
2. The curren
PROBLEM SET FOR CH 2 Suggested Solutions 1. See textbook and lecture notes. 2 BJM Q2.1 a. False. From Table 2-1, labour income in 2001 was 58% of GDP and capital income (including depreciation) was 30%. The rest went to the government in the form of indir
PROBLEM SET FOR CH 8 Suggested Solutions November 10, 2004 1. BJM Q8.1 a. False. A smaller multiplier means that a higher level of government spending (or a larger tax cut) is required to achieve the same (horizontal) shift of the IS curve, at each level
PROBLEM SET FOR CH 7 Suggested Solutions November 1, 2004 1. See textbook and lecture notes. 2 BJM Q7.1 a. False. Goods market equilibrium requires I S T - G Q - X A trade deficit could be due to high investment (if it has very good investment opportuniti
PROBLEM SET FOR CH 4 Suggested Solutions Sept 30, 2004 1. See textbook and lecture notes. 2 BJM Q4.1 a. False. Income is a flow variable, that is, it is expressed per unit of time (income per week, income per year) and is measured as the sum of the flow f
PROBLEM SET FOR CH 3 Suggested Solutions Revised Sept 28, 2004 1. See textbook and lecture notes. 2 BJM Q3.1 a. True. In 2001, consumption totalled 57% of GDP, government spending was 21%, investment was 17%, and the remaining 5% was net exports. b. False
PROBLEM SET FOR CH 6 Suggested Solutions October 18, 2004 1. See textbook and lecture notes. 2 BJM Q6.1 a. Uncertain. If we ignore measurement error, then countries with net capital inflows have a positive capital account balance, and a positive capital a
PROBLEM SET FOR CH 9 Suggested Solutions November 23, 2004 1. See textbook and lecture notes. 2 BJM Q9.1 a. False. The participation rate in Canada has drifted upwards, thanks largely to the increasing labour force participation of women, since 1950. At 6
PROBLEM SET FOR CH 21 Suggested Solutions October 5, 2004 1. See textbook and lecture notes. 2 BJM Q5.1 a. True. This is true by assumption in our model, but it seems sensible. Introspection suggests that the level of sales and the rate of interest are im
PROBLEM SET FOR CH 10 Suggested Solutions November 25, 2004 1. See textbook and lecture notes. 2 BJM Q 10.1 a. False. The aggregate supply curve says that the wage setting equation consistent with labour market equilibrium and the firm's price setting rel
PROBLEM SET FOR CH 12 Suggested Solutions January 25, 2004
1. See textbook and lecture notes. 2 BJM Q 12.1a-12.1g a. False. As a matter of arithmetic (see the notes on deriving Okun's Law), output must grow as fast as the labour force and labour productiv
ECO202: Solutions to Test 1
Extra Credit:
1. Eugene Fama
2. Lars Peter Hansen
3. Robert Schiller
1. (20 points total) Suppose all markets in a closed-economy begin in equilibrium. The
government has decided to engage in fiscal policy that will ultimately