ECMC61_winter 2012 midterm answer.docx

9 Pages
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Department
Economics for Management Studies
Course Code
MGEC61H3
Professor
Iris Au

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Description
ECMC61 Midterm Answer KeyWinter 2012Question 1 20 pointsPart a 15 points1 point will be subtracted for each incorrect entryABCGross domestic product330025003700Consumption198018002035Investment480290635Government spending670910700Current account170 500330Nonreserve portion of financial account1475 625 85Official reserve transactions 23255625 330Capital account 85085Part b 5 points 4 pts for explanationChange in a countrys foreign wealth KA KAORTnonresWhen KA is positive this implies the country is a net seller of assets its holding of foreign assets ABC in foreign wealth KA85 500415 Since the change in foreign wealth is negative for B thus B finds its foreign wealth Foreign wealth decreases by 500 1 ptNote You should comment on the countrys KA and ORT not just oneBesides you nonresshould show what happens to all three countries not just what happens to one country1ECMC61 Midterm Answer KeyWinter 2012
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