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Department
Economics
Course
ECON 2H03
Professor
Rashid Khan
Semester
Summer

Description
Regular Quiz 4Econ 2H03June 17 2013There are 40 TrueFalse Questions worth 100 marks Bubble a if all parts are true and bubble b if all or some parts are false1Consider a small open economy macro model under flexible exchange rate Assume that both S and NX are zero at the initial equilibrium Check the effects Gof lower taxes and lower world interest rateCausesYeNXCSSSIS IPG00T00r2Consider a small open economy macro model under fixed exchange rate Assume that both S and NX are zero at the initial equilibrium Check the effects of lower Gtaxes and lower world interest rateCausesYMNXCSSSIPG000 T00r3Lower cashbalance fraction due to improved ATM system will shift the LM curve to the right As a result M will decrease but both NX and Y will remain unchanged in a small open economy with fixed exchange rate system4Consider a closed economy macro model with a consumption function of C10008Y where the autonomous consumption is 100 With an increase in Dautonomous consumption the IS curve will shift to the right As a result C will increase Y will increase S will decrease r will increase and investment will Pdecrease5Consider a small open economy macro model with flexible exchange rate system with a consumption function of C10008Y where the autonomous Dconsumption is 100 With an increase in autonomous consumption the IS curve will shift to the right As a result C will increase S will decrease e will increase Pand NX will decrease and Y will decrease6Consider a small open economy macro model with fixed exchange rate system with a consumption function of C10008Y where the autonomous Dconsumption is 100 With an increase in autonomous consumption the IS curve will shift to the right As a result C will increase S will increase and Y will Pincrease and M will increase7Consider a shortrun closed economy with an upsloping LM curve and a downsloping IS curve with an investment function of I40025rIf autonomous investment increases to 500 it will lead to higher GDP
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