Class Notes (835,705)
MGEA06H3 (157)
Iris Au (146)
Lecture

# H100005

4 Pages
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Department
Economics for Management Studies
Course
MGEA06H3
Professor
Iris Au
Semester
Winter

Description
ECMA06 Midterm Winter 2007 Question 5 Question 5: In December 2006, the Consumer Price Index was 130.2; in December 2000, the Consumer Price Index was 115.1 (these are true figures, setting the index equal to 100.0 in June 1992). The average annual rate of inflation in the 6 years between December 2000 and December 2006 (to the nearest one-hundredth of a percent) was [hint - remember that the inflation rate compounds each year]: A) 1.02% B) 2.08% C) 2.20% D) 2.37% E) 2.53% F) 2.67% G) 3.25% H) 4.45% I) 4.50% J) 5.33% ECMA06 Midterm Winter 2007 Question 6 - 7 Question 6 – Question 7: An economy has no government and no foreign sector, and produces only consumer goods. There are 3 consumer goods, and the country has the following prices and quantities consumed (and produced) in 1997 and 2007 (questions 6 through 8 deal with this problem): 1997 2007 Price Quantity Price Quantity Food \$2.00 100 \$4.00 80 Clothing \$8.00 50 \$10.00 50 Housing \$20.00 20 \$17.00 40 6. If the consumer price index is 150 in 1997, then the consumer price index for 2007 (to the nearest unit) is: A) 225 B) 124 C) 186 D) 136 E) 110 F) 165 G) 150 H) 204 I) 2250 J) 121 7. If the GDP-deflator is 150 in 1997, then the GDP-deflator for 2007 (to the nearest unit) is: A) 225 B) 124 C) 186 D) 136 E) 110 F) 165 G) 150 H) 204 I) 2250 J) 121 8. The government is interested in whether the average consumer in the economy (whose income rose at the same rate as GDP) is better off in 1997 or in 2007. Your best answer would be: A) The average consumer is better off in 1997. B) The average consumer is better off in 2007. C) We cannot say for sure whether the average consumer is better off in 1997 or 2007. D) We do not have enough information to answer this question. ECMA06 Midterm Winter 2008 Question 7 - 8 Question 7 – Question 8: An economy produces 3 different goods, designated as X, Y, and Z. Some of good X is exported. The economy imports some of good Z. The following chart provides you with all the information you will need on production and use of the three goods in 1997 and 2007 (questions 7 and 8 deal with this problem): 1997: Domestic Domestic Domestic Used by Gov’t Production Consumption Investment Agencies Exports Imports Price X 200 100 20 20 60 0 \$10 Y 300 200 40 60 0 0 \$5 Z 50 100 0 0 0 50 \$12 2007: Domestic Domestic Domestic Used by Gov’t Production Consumption Investment Agencies Exports Imports Price X 250 100
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