ECON 4710 Chapter : Ec4710fall2015 Hw1
EC4710
Fall 2015
Areendam Chanda
Homework 1 (due September 8th, 2015)
PART A
This is the first part of the first homework assignment. It’s a macro refresher based on what you have learned in
ECON 2000 or 2010. Part B follows part A.
1. If the price of motel rooms increases by 10% while the prices of other goods and services increase by 5% on
average, the relative price of motel rooms has:
A. increased.
B. decreased by 5%.
C. decreased by 10%.
D. remained constant.
2. Periods of unusually low production in an economy result in unemployment.
A. cyclical
B. environmental
C. structural
D. frictional
3.
Refer to the figure above. Based on the figure, which interval represents a business cycle expansion?
A. A to B
B. B to C
C. A to B to C
D. B to C to D
4. The inside lag is relatively shorter for policy and the outside lag is relatively shorter for policy.
A. monetary; fiscal
B. monetary; monetary
C. fiscal; monetary
D. fiscal; fiscal
5. If bank reserves are 200, the public holds 400 in currency, and the desired reserve/deposit ratio is 0.25, the
deposits are and the money supply is _.
A. 200; 600
B. 400; 800
C. 600; 1,000
D. 800; 1,200
6. Peg's Manicure Manor did 4,000 sets of nails in 2010 and 4,500 sets of nails in 2011. The price of a set of
nails was $20 in 2010 and $22 in 2011. If 2010 is the base year, Peg's contribution to real GDP in 2011 was
and to nominal GDP in 2011 was .
A. $80,000; $88,000
B. $80,000; $90,000
C. $80,000; $99,000
D. $90,000; $99,000
7. Suppose the following information describes the economy:
Private saving equals ; public saving equals ; national saving equals . A.
100; 200; 100
B. 100; 100; 200
C. 200; 100; 300
D. 200; 100; 500
8. If the Citrus Growers Association grows $1 million worth of oranges, sells $500,000 worth of oranges to
consumers, uses the rest to make orange juice that is sold to consumers for $3 million, Citrus Grower's
contribution to GDP is:
A. $500,000. B.
$1,000,000.
C. $3,500,000.
D. $4,000,000.
9. In which of the following situations would GDP not change?
A. As domestic consumers buy fewer tobacco products, tobacco manufacturers instead sell their products, at the
same price, to foreign buyers.
B. Domestic consumers begin to buy less imported wine, and instead spend just as much money on
domestically produced wine.
C. Without reducing the number of automobiles sold, domestic automobile producers decide to reduce the
Document Summary
This is the first part of the first homework assignment. It s a macro refresher based on what you have learned in. _. and to nominal gdp in 2011 was: peg"s manicure manor did 4,000 sets of nails in 2010 and 4,500 sets of nails in 2011. The price of a set of nails was in 2010 and in 2011. If 2010 is the base year, peg"s contribution to real gdp in 2011 was: ,000; ,000, ,000; ,000, ,000; ,000, ,000; ,000, suppose the following information describes the economy: Over the next 100 years, real gdp per person grows at a 1 percent annual rate in alpha and at a 2 percent annual rate in omega. Gdp per person in alpha is: ,000, ,410, ,080. D. ,080 smaller than real gdp per person in omega: suppose a jar of orange marmalade that is ultimately sold to a customer at the corner store is produced by the following production process:
