Buy Intermediate Macro Problem Set Questions

Buy Intermediate Macro Problem Set Questions
1. Based on your understanding of the aggregate expenditure model, we know with certainty that an equal and simultaneous increase in G and T will cause:
(a) an increase in output
(b) no change in output
(c) a reduction in output
(d) an increase in investment (e) a decrease in investment
For the following two questions, suppose an economy produces only milk and butter. As- sume that all production is consumed in each year, and that price and quantity data are given in the tables below.
Year 1
Good Quantity Price
Milk 500 $2 Butter 2000 $1
Year 2
Good Quantity Price
Milk 900 $3 Butter 3000 $2
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2. (Refer to the above tables) Between Year 1 and Year 2, real GDP (based on Year 1 as a base year) grew by
(a) 58.18% (b) 158.18% (c) 160% (d) 60%
(e) 260%
3. (Refer to the above tables) Between Year 1 and Year 2, the GDP deflator (based on Year 1 as a base year) rose
(a) 81.25% (b) 90%
(c) 190% (d) 83.33 (e) 183.33%
ECON 301: Intermediate Macro Problem Set