ECON 2400 Study Guide - Midterm Guide: International Monetary Fund, Real Interest Rate, Risk Premium
Document Summary
Section i: multiple choice questions (total marks 32) Each correct multiple choice answer is worth 4 marks. Explain: (15 marks) the newspaper reported that last year inflation in canada, measured as a cpi, was 2. 0%. The international monetary fund however reported that canadian inflation, measured as a gdp deflator, was 2. 3% last year. Justify why the two measures should or should not be the same: (10 marks) the current nominal interest rate on a 6 month treasury bill is 5%. The nominal interest rate on a 6 month treasury bill, 6 months from now is expected to be 4. 5%. Justify your answer. (15 marks) assume that aggregate output is produced according to a cobb- (etlt)1 (b) using the above production function solve for the solow residual (hint: the. A produces wheat worth ,000, out of which ,000 it sells directly to consumers, ,500 it sells to the beer factory and it keeps in storage for next year.
