MGEB06 Chapter 9 Tutorial 1
Question 1
A pair of economics experts Doctors ABC and XYZ, are having a debate about the
usefulness of inflation targeting, that is using monetary policy to keep the inflation rate
between 2 and 3 percent per year. Dr. XYZ cla

MGEB06 - Chapter 7 Tutorial 1
Question 1 (Chapter 7, Problems and Applications #6)
Many demographers predict that Canada will have zero population growth in the twentyfirst century, in contrast to average population growth of about 1.6 percent per year in

MGEB06 - Chapter 8 Tutorial 1
Question 1 (Chapter 8, An old exam question)
Suppose the closed economy of the Galapagos Islands has an aggregate production
function given by Y 5 * K 0.50 L E 0.50 , where Y, K, L & E have their usual
interpretation (as per

MGEB06 - Chapter 6 Tutorial 1
Question 1
The economy is in its long run equilibrium. The labour force survey has found that the number
of unemployed, employed, and not in the labour force are 1500, 18500, and 5000 respectively,
and the sizes of these cate

MGEB06 Chapter 5 Tutorial 2
Question 1
Suppose there are only two countries in the world, Foreign and Home. Foreign is a large country
while Home is a small country. Besides, Home has balanced trade. Suppose the government of
Foreign reduces its governmen

MGEB06 Chapter 5 Tutorial 1
Question 1
A small open economy can be described by the following equations:
Y = 1000
C = 300 + 0.5(Y T) 20r, where r = real interest rate
I = 200 30r
NX = 100 + 0.2(Y T) 10
G = T = 100
rw = 4%
Note: r is measured in percentage

MGEB06 - Chapter 4 Tutorial 1
Question 1
According the quantity theory of money, if the monetary growth rate is 5% and the percentage
change in velocity is 0%, then the inflation rate would be equal to 5%. True/False/Uncertain,
explain.
Question 2
Since t

MGEB06 Chapter 3 Tutorial 2
Question 1
A closed economy can be described by the long-run classical model:
Y = 3K1/4L3/4
C = 11800 + 0.8(Y T) 750r
I(r) = 13330 550r
Note: r represents the real interest rate and is measured in percentage points (for example

MGEB06 Chapter 3 Tutorial 3
Question 1
How are the marginal products of labour and capital affected by an adverse technological
shock? What happens to the real wage and real rental price of capital? Explain with the
aid of two diagrams: one for the labour