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S2013 - Solution to Test 1 - ECO209 - June 14, 2013.pdf

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Robert Gazzale

DepartmentofEconomicsProfGustavoIndart University of TorontoJune 14 2013ECO 209YL0101 MACROECONOMIC THEORYTerm Test 1SOLUTIONS LAST NAME FIRST NAME STUDENT NUMBERINSTRUCTIONS1 The total time for this test is 1 hour and 50 minutes 2 Aids allowed a simple calculator 3 Usepen instead of pencilDO NOT WRITE IN THIS SPACEP a r t I20 P a r t I I20 PartIII110210310410T O T A L80Page 1 of 13PART I20 marks Enter your answer to each question in the table below Only the answer recorded Instructionsin the table will be marked Table cells left blank will receive a zero mark for that question Each question is worth 2 marks No deductions will be made for incorrect answers1 2 3 4 5 6 7 8 9 10 D C C E A C A B C E 1 Jims Nursery produces and sells 1400 worth of flowers Jim uses 200 in seeds and fertilizer pays his workers 700 in wages pays 100 in taxes pays 200 in interest on a business loan and makes a profit of 200 Jims contribution to GDP isA 900B 1000 C 1100 D 1200 none of the above E2 Consider an economy without depreciation of the capital stock without government transfer payments and where personal income tax is the only source of government revenues If GDP is 980 billion consumption is 650 billion private savings is 120 billion government purchases is 180 billion and net exports is 30 billion which of the following is true in this economy A Disposable income is 860 B Investment is 120 C The budget deficit is 30 D Personal income tax is 250 E None of the aboveUse this space for rough workPage 2 of 13
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