MGEA06H3 Midterm: Midterm_Answer_Winter_2007.doc

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periwinkletiger443

24 Apr 2012

School

UTSC

Department

Economics for Management Studies

Course

MGEA06H3

Professor

Dan Dolderman

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MGEA06H3 Full Course Notes

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Sketchy solutions to term test, written on february 12, 2007. Please note that there were 2 different versions of the exam, with both questions and answers scrambled, so answer key varies between exams. The two versions were labeled version a and version b. Version a: e e c e b c f b i j h e c b d g e d h e f d f e b. Version b: f f d f c f c a j i g h d a e h d e g f d f e b f. Q1: current gdp is billion, population is 32 million, so gdp per person is billion/32 million = ,440,000/32 =,000. Q2: current u is about 6%, last major recession was in early 1990s. Q3-4: current u in atlantis is 1680/24,000 = 7%; 563 new jobs reduce number of unemployed to. 1617, increase labour force to 24,500, so u = 563/24,500 = 6. 6%

Related Questions

QUESTION 31

Suppose that twenty-five years ago a country had nominal GDP of $1,800, a GDP deflator of 150, and a population of 100. Today it has nominal GDP of $2,800, a GDP deflator of 270, and population of 180. What happened to the real GDP per person?

It more than doubled

It increased, but it less than doubled

It was unchanged

It decreased

1 points

QUESTION 32

During a presidential campaign, the incumbent argues that he should be reelected because nominal GDP grew by 12 percent during his 4-year term in office. You know that population grew by 4 percent over the period and that the GDP deflator increased by 6 percent during the past 4 years. You should conclude that real GDP per person

grew by 2%

grew by 6%

grew by 8%

grew by 12%

1 points

QUESTION 33

Suppose todayâs CPI is 134.85, and suppose one must spend $986 today to purchase the same basket of goods and services that could be bought for $680 in 1989. Then the CPI in 1989 was

24.27

60.68

93.00

195.53

1 points

QUESTION 34

If your firmâs production function has a decreasing returns to scale and you increase all your inputs by 60%, then your firm's output will

not change

increase, but by less than 60%

increase by 60%

increase by more than 60%

QUESTION 36

Suppose country's nominal GDP tripled, population grew by 40%, and prices doubles over the last 25 year. What happened to nominal GDP per person?

increased by 114%

increased by 93%

increased by 87%

decreased by 69%

1 points

QUESTION 37

A barber shop produces 288 haircuts a day. Each barber in the shop works 8 hours per day and produces the same number of haircuts per hour. If the shopâs productivity is 3 haircuts per hour of labor, then how many barbers does the shop employ?

None of the above is correct

1 points

QUESTION 38

If the nominal interest rate is 11% and the rate of inflation is 6%, then the real interest rate is

-5%

1.67%

11%

1 points

QUESTION 39

Last year real GDP in Greatland was 651 billion and the population was 2.4 million. The year before, real GDP was 460 billion and the population was 1.9 million. What was the growth rate of real GDP per person during the year?

12 percent

10 percent

4 percent

2 percent

1 points

QUESTION 40

If real GDP increases by 40% and the GDP deflator decreases by 10%, then nominal GDP increases by

40%

30%

26%

-10%

Use the following information about Employment Country to answer the following questions. Numbers are in millions.

	2013	2014
Population	223.6	226.5
Adult population	168.2	169.5
Number of unemploymed	7.4	8.1
Number of employmed	105.2	104.2

What is the labour force in 2013 and 2014?

What is the growth rate of labour force between 2013 and 2014?

What is the unemployment rate in 2013 and 2014?

From 2013 to 2014, the adult population went up while the labour force went down. Provide a number of explanations why this might have occurred.

If the natural rate of unemployment (equilibrium unemployment) in Employment Country is 6.6 percent, what is the maximum that cyclical unemployment could be in 2013 and 2014? Is Employment Country likely to be experiencing a recession in either of these years? (Hint: compare the equilibrium unemployment with the levels of unemployment you found in question 3. for 2013 and 2014)

8. Which of the following items is included in the calculation of GDP?

a.Purchase of a used car.

b.Purchase of 100 shares of General Motors stock.

c.Purchase of an intermediate good.

d.None of the above would be included

9. Difference between Real and Nominal GDP is:

a.Change in price level from base year to current year

b.Measured by excluding some of the sectors

c.That real GDP is always smaller than Nominal GDP

d.None of the above

10. GDP in an economy is $11,050 billion. Consumer expenditures are $7,735 billion, government purchases are $1,989 billion, and gross investment is $1,410 billion. Net exports are:

a.+$53 billion

b.-$84 billion

c.-$47 billion

d.-$161 billion

11. Equality (As a tool of measurement for quality of life) refers to a balance of Economic and Political Power between which two groups?

a.Homeless and Employed

b.Men and Women

c. Different ethnic groups

d. Rich and Poor

12.What is inflation?

a.A fall in the general level of prices occurs, workers need more money to pay for goods, clothing, and shelter

b.A rise in the general level of prices occurs, workers need more money to pay for goods, clothing, and shelter

c.A rise in the general level of prices occurs, workers need less money to pay for goods, clothing and shelter

d.A fall in the general level of prices occurs, workers need less money to pay for goods, clothing and shelter

13.Which of the following is the best measure of how inflation affects consumers?

A.The increase in the price of gold

B. The increase in the consumer price index

C. The increase in the price of a single product

D. The decrease in the consumer price index

14. The Consumer Price Index (CPI)

a. Measures the rate of output in the economy over one year.

b.Measures the increase in wholesale prices since a base year.

c.Is deficient because it does not include medical prices.

d.Is used to calculate the rate of inflation over a given period.

15.How is the unemployment rate computed?

a. Number of unemployed persons divided by the number of economically active (i.e. employed and unemployed) persons aged fifteen years and over.

b.Number of unemployed persons divided by the number of people aged fifteen years and over.

c.Number of unemployed persons divided by the number of employed persons aged fifteen years and over.

d.None of the above

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MGEA06H3 Midterm: Midterm_Answer_Winter_2007.doc

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