1 Multiple Choice - DING DONG 董 丁
ECON2123 Final Practice Question Solution11Multiple Choice1. If a Hong Kong construction company hire local Chinese worker to built a road in mainland China,this activity would beA) fully included in Mainland GNPB) fully included in Mainland GDP.C) excluded from Hong Kong GNP.D) included in Hong Kong GDP but not in Hong Kong GNP.Answer: B.2. Suppose consumption C 100 0.5YD and Investment I 100. Every things equal, an increase in thepropensity to consume from 0.5 to 0.75 will definitely lead toA) a decrease in total saving.B) the e ects on both total saving and consumption are unknown.C) an increase in consumption.D) a decrease in consumption.Answer: C.Solution: Let’s denote the MPC as c1 . For any given level of autonomous spending, a higher c1 willimply a higher output. Given that both output and MPC increase, the consumption must be higher.Given that marginal propensity to save decreases, the e ect on saving is unknown.3. Every other thing equal, an increase in the risk of investment return would cause the IS curve toA) remain unchangedB) shift down and to the leftC) shift up and to the rightD) remain unchanged if the risk is small.Answer: B.Solution: This is a similar e ect as of a decrease in investor confidence.4. Suppose investment spending is very not sensitive to the interest rate. Given this information, weknow that:A) the IS curve should be relatively steepB) the IS curve should be relatively flatC) the LM curve should be relatively flatD) the LM curve should be relatively steepAnswer: A.Solution: method 1: draw two figures with di erent sensitivity, and compare. method 2: consider anextreme case when investment spending is not sensitive to the interest rate at all. Then the IS curve is1 The question is provided by Prof. Wang. The answers are provided by Astor and Ding. The solutions are providedby Ding Dong. All errors in solutions are Ding’s.1
a vertical line. Thus, IS curve should be relatively steep when investment spending is very not sensitiveto the interest rate. LM curve will not be a ected by the sensitivity.5. According to IS-LM model, under which circumstance, the increase in money is most e ective inboosting the economy?A) investment is not sensitive to output change at all.B) IS curve is verticalC) IS curve is flatD) Investment is fixed.Answer: C.Solution: The increase in money supply boosts the economy by reducing interest rate to increaseinvestment. Thus the more sensitive investment is to interest rate ( IS curve is flat), the moree ective is monetary policy.6. For this question, assume that individuals hold NO currency (i.e., c 0.0). If the ratio of reservesto deposits is .25, a purchase of 1000 of bond by the central bank will leads to () increase in moneysupply:A) 4000B) 3000C) 5000D) 1000Answer: A.Solution: See lecture note/ tutorial slide on financial market.7. Based on our understanding of the labor market model presented in Chapter 6, the new labor lawin China which increases the protection of workers to be laid o would leads to :A) a reduction in the equilibrium real wageB) an increase in the equilibrium real wageC) a reduction in the natural rate of unemploymentD) an increase in the natural rate of unemploymentAnswer: D.Solution: The law increases unemployment benefit(z). The equilibrium real wage is determined by pricesetting equation, and it will not be a ect by change in z. From the labor market equilibrium, when zincreases, natural level of unemployment must increase for equation 1 (1 m)F (un , z) to hold.8. Based on our understanding of the labor market model presented in Chapter 6, an increase in oilprice will make,A) a reduction in the equilibrium unemployment rateB) a rise in the real wageC) a rise in the aggregate priceD) a rise in natural rate of outputAnswer: C.Solution: The e ect will be the same as of an increase in mark-up.2
9. Based on your understanding of the AS/AD model, which of the following is an INCORRECTstatement about the short-run adjustment process for the macro economy?A) A reduction in employment leads to lower pricesB) An increase in output above the natural level leads to higher nominal wagesC) Output in excess of the natural level leads to higher pricesD) none of the aboveAnswer: D.Solution: A reduction in employment is equivalent to a reduction in output, which does not necessarilylead to price reduction.10. Based on your understanding of the AS/AD model, an permanently reduction in governmentspending will lead to ( ) in the medium runA) an increase in consumptionB) a decrease in consumptionC) an increase in investmentD) a decrease in investmentAnswer: C.Solution: In the medium run, output remains unchanged, but interest rate will be lower. Thus consumption remains unchanged but investment will be higher.11. Which of the following will cause the velocity of money to decrease?A) the introduction of credit cards into the economyB) a reduction in the interest rateC) an increase in the interest rateD) all of the aboveE) none of the aboveAnswer: B.12. Which of the following will cause a rightward shift in the money demand curve?A) an increase in the money supplyB) a reduction in the interest rateC) a reduction in incomeD) all of the aboveE) none of the aboveAnswer: E.Solution: The question is equivalent to asking: given interest rate level, which one will increase moneydemand. Money supply change or interest rate change will move along the curve. A reduction in incomewill decrease money demand. None is correct.13. Suppose the economy is operating on the LM curve but not on the IS curve. Given this information,we know that:A) the money market and goods market are in equilibrium and the bond market is not in equilibrium.B) neither the money, bond, nor goods markets are in equilibrium.C) the money market and bond markets are in equilibrium and the goods market is not in equilibrium.3
D) the money, bond and goods markets are all in equilibrium.E) the goods market is in equilibrium and the money market is not in equilibrium.Answer: C.14. Which of the following represents the medium-run e ect of a reduction in the money supply?A) a decline in outputB) a decrease in the price levelC) an increase in the interest rateD) all of the aboveE) none of the aboveAnswer: B.Solution: See lecture note/ tutorial note on AS-AD.15. Assume the economy is initially operating at the natural level of output. Now suppose a budget ispassed that calls for a tax cut. This fiscal expansion will, in the medium run, have no e ect on whichof the following?A) the price levelB) the interest rateC) employmentD) all of the aboveE) none of the aboveAnswer: C.Solution: See lecture note/ tutorial note on AS-AD.16. Assume the economy is initially operating at the natural level of output. Which of the followingevents will NOT change the composition of output (i.e., the percentage of GDP composed of consumption, investment, etc.) in the medium run?A) an increase in consumer confidenceB) a reduction in government spendingC) an increase in the money supplyD) a cut in taxesE) a reduction in the desire to saveAnswer: C.Solution: Changes in consumer confidence, government spending will a ect both IS and LM curve inthe medium run, leading to no changes in output but changes in interest rate. Changes in money supplyhave no e ect on either IS or LM in the medium run, thus will not a ect consumption, investment orgov spending.17. Answer this question using the AS/AD model presented in the textbook. Which of the followingwould cause a reduction in the natural level of output in the medium run?A) an increase in taxesB) a decrease in government spendingC) a decrease in the money supplyD) both A and C4
E) none of the aboveAnswer: E.Solution: See lecture note/ tutorial note on AS-AD.18. At the current level of output, suppose the actual price level is greater than the price level thatindividuals expect (i.e., Pt Pte ), We know that:A) the nominal wage will tend to decrease as individuals revise their expectations of the price level.B) output is currently below the natural level of output.C) the AS curve will tend to shift down over time.D) the interest rate will tend to rise as the economy adjusts to this situation.E) none of the aboveAnswer: D.Solution: Individuals will adjust their price expectation up, leading AS curve to shift up. LM curvewill shift to the left thus interest rate will be higher.19. Assume the economy is initially operating at the natural level of output. Which of the followingevents will initially cause a shift of the aggregate supply curve?A) an increase in consumer confidenceB) an increase in the money supplyC) an increase in government spendingD) all of the aboveE) none of the aboveAnswer: E.Solution: See lecture note/ tutorial note on AS-AD.20. Suppose the economy is operating at the steady state and that there is no technological progress.Which of the following is true given this information?A) The growth of output per worker is zero.B) The growth of output per worker is equal to the rate of investment.C) The growth of output per worker is equal to the rate of depreciation.D) The growth of output per worker is equal to the rate of saving.E) none of the aboveAnswer: A.Solution: See lecture note/ tutorial note on growth theory.21. Suppose in an economy without technology progress and population growth, an increase in depreciation rate, will lead to total deprecation k to () ?A) increase.B) decreaseC) unchanged.D) increase if and only the saving rate is above the golden rule level.E) decrease if and only the saving rate is above the golden rule level.Answer: B.5
Solution: Write steady state k as a function of , for example, k (s/ )1/(1 ) , thus k (s/ )1/(1 ) .If increases, k will decrease.22. Suppose there is a reduction in the saving rate. This reduction in the saving rate must cause areduction in consumption per capita in the long run when:A) the saving is used for consumption rather than physical capital.B) capital per worker already is less than the golden-rule level.C) the rate of saving exceeds the rate of depreciation.D) there is no technological progress.E) there is no population growth.Answer: B.Solution: Reduction in the saving rate must cause a reduction in consumption per capita in the longrun when saving rate is lower than golden-rule level. Because capital per worker is increasing withsaving rate in the steady state. In this case capital per worker must be less than the golden-rule level.23. Suppose two countries are identical in every way with the following exception. Economy A has ahigher rate of depreciation ( ) than economy B. Given this information, we know with certainty that:A) steady state consumption in A is lower than in B.B) steady state consumption in A and in B are equal.C) steady state growth of output per worker is higher in A than in B.D) steady state consumption in A is higher than in B.E) none of the aboveAnswer: A.Solution: steady state consumption is a decreasing function of . Steady state growth of output perworker is zero.24. At the current steady state capital-labor ratio, assume that the steady state level of per capitaconsumption, (C/N ) , is less than the golden rule level of steady state per capita consumption. Giventhis information, we can be certain that:A) a reduction in the saving rate will have an ambiguous e ect on (C/N)*.B) an increase in the saving rate will cause an increase in the steady state level of per capita consumption((C/N ) ).C) the capital labor ratio will tend to decrease over time.D) the capital labor ratio will tend to increase over time.E) a reduction in the capital-labor ratio will cause a reduction in (C/N ) .Answer: A.Solution: If saving rate is above golden rule level, a reduction in the saving rate will increase consumption per worker; If saving rate is below golden rule level, a reduction in the saving rate will decreaseconsumption per worker.25. Suppose an economy experience a 4% increase in each of the following variables: N, K,if theproduction exhibits constant return to scale and no change in technology. Other things equal, Giventhis information, we know with certainty that:A) Y will increase by less than 4%.6
B) Y will increase by exactly 4%.C) Y will increase by more than 4%.D) Y will increase by less than 8% but by more than 4%.E) none of the aboveAnswer: B.Solution: Definition of constant return to scale.26. Suppose policy makers want to increase Y and and keep NX unchanged, Which of the followingpolicies would most likely achieve this?A) a real appreciationB) an increase in the real exchange rateC) an increase in government spending and a depreciation in the real exchange rateD) a reduction in government spendingE) encourage the countrys trading partners to implement policies that will cause a reduction in foreignincome (Y*)Answer: C.Solution: An increase in government spending increases Y but decreases NX; a depreciation in the realexchange rate increases both Y and NX. Combining this two promises an increases in Y and possiblyunchanged NX.27. For this question, assume that there is a tax cut. In a fixed exchange rate regime, we know withcertainty that:A) consumption will increase.B) investment will increaseC) money supply will increaseD) output will increase.E) all of the aboveAnswer: E.Solution: Fixed exchange rate regime implies that interest rate cannot be changed. Tax cut policy willincrease output, and is likely to increase interest rate if money supply doesn’t change. So money supplymust increase to maintain interest rate. As a consequence, output, consumption, investment increase.28. For this question, assume the Marshal-Lerner condition holds. Which of the following would occuras a result of an increase in the real exchange rate?A) an increase in domestic outputB) an improvement of the trade balanceC) a reduction in the quantity of importsD) all of the aboveE) none of the aboveAnswer: E.29. In an open economy under flexible exchange rates, a reduction in the money supply will alwayscauseA) a reduction in output7
B) an appreciation in the nominal exchange rate, EC) a decrease in the interest rateD) all of the aboveE) only A and BAnswer: E.Solution: See lecture notes/tutorial notes on Open Economy IS/LM.30. In an open economy under fixed exchange rate policy, an increase in government spending will makeA) Output to increaseB) Money supply to increaseC) Investment to increaseD) Only A and BE) A, B and C.Answer: E.Solution: Fixed exchange rate regime implies that interest rate cannot be changed. Expansionaryfiscal policy will increase output, and is likely to increase interest rate if money supply doesn’t change.So money supply must increase to maintain interest rate. As a consequence, output, consumption,investment increase.8
2Short Essay1. Unemployment Benefits varies a lot across countries and regions. For example, in Sweden, theunemployed will receive about 70 percent of his or her normal income during the last 12 months forabout one and a half year. While in Hong Kong and Singapore, there is no comparable system available.The unemployment rate in Sweden is 7.9% 4.0% in Hong Kong and 2.2 in Singapore in the Decemberof 2010.a. Use the labor diagram we learn in Chapter 6 to explain why Sweden has a higher unemploymentrate than Hong Kong and Singapore?b. The reason why the Administration in Hong Kong and Singapore does not support the establishmentof an unemployment assistance system is that in their opinion, what the unemployed need is a job ratherthan a cash hand-out.Provide a Pro (for) and a Con (against ) to such opinion.Solution: As attached.9
2. Suppose that one economy is initially at the natural level of output.a. Using the AS/AD, IS/LM diagrams to analyze the e ect of a decline in consumer’s confidence onconsumption, output, investment and interest rate in the short run, in the medium run.b. suppose that the central bank is making decision on monetary policy to maintain the natural leveloutput. Should the central bank increase money supply or decrease money supply? Briefly explain why.Solution: As attached.10
3. The growth model. Suppose there is population and technology level is constant. The productionfunction ispY KN(1)a. Does this production feature constant return to scale?b. Write y f(k), where y Y/N, k K/N.c. Assume there is no government, and the private saving rate is a constant fraction of the householddisposable income, s 0.3. And depreciation rate, , is 0.1. Solve for the steady-state k, y and c.d. solve for the golden-rule level of saving rate in the above economy with no government. And recommend a tax policy for the government to achieve the golden-rule of capital, output and consumption.Solution: As attached.11
4. Suppose an economy with the following informationC 6 0.8(YT)G 15; T 20I 10 0.2YN X 100.25Y100i50("1)where " is the real exchange rate. Suppose the foreign interest rate is 5% and expected exchange rateE e 1.05. Price level is equal to 1 in both countries, namely P P 1.a) Write down the real exchange rate as a function of normal interest rate i.b. Derive the IS curve in the open economy.We have the following information regarding the financial market:M/P Y100iThe total money supply is M 30.c. Solve for Y,i,C,I,NX, " and E for this economy under flexible exchange rate.d. Now consider the government wants to achieve Y 40, NX 0, how should the money supply be? Ifthe government keeps T 20 to achieve Y 40, NX 0, how should the government set its governmentspending?e. Now consider the original case with M 30 and g 15; t 20, but the economy is under fixed changerate with E 1. What is the equilibrium Y, i,C, I, NX and "? What is the money supply to be consistentwith the equilibrium condition under fixed exchange rate policy?f. In order to achieve trade balance NX 0, G 15, how should the government set its taxes?Solution: As attached.12
MC:1-5. BCBAC6-10 ADCDC11-15 BECBC16-20 CEDEA21-25 BBAAB26-30 CEEEEECON2123-FINALPRACTICE-SOLUTIONShort Essay:1a. Use the labor diagram we learn in Chapter 6 to explain why Sweden has a higherunemployment rate than Hong Kong and Singapore?Answer: For any given Price Setting Equation, the wage setting equation of Sweden is higherthan that of Hong Kong/Singapore. Thus the equilibrium unemployment is higher inSweden.1b. The reason why the Administration in Hong Kong and Singapore does not support theestablishment of an unemployment assistance system is that in their opinion, what theunemployed need is a job rather than a cash hand-out. Provide a Pro (for) and a Con(against) to such opinion.Answer:Pro: With high unemployment benefit, the equilibrium /natural level of unemployment willbe higher, thus more people will end up with no job.(additional points:)If a worker is unemployed for a long period of time, they may lose their skills and it wouldbe even more difficult for them to find a job. Also, it may reduce the incentive ofunemployed workers to look for jobs in the market.Con: Unemployed people have no income, thus no spending. Therefore the effectivedemand is low in the economy, leading to low output.1
(additional points:)For some workers, especially for those low skilled workers, it’s very difficult to get job in themarket. It may be a good idea for the government to provide them with unemploymentbenefit for a certain period of time, help them to equip with better skills and improve theircompetitiveness in the labor market2. Suppose that one economy is initially at the natural level of output.a. Using the AS/AD, IS/LM diagrams to analyze the effect of a decline in consumer’sconfidence on consumption, output, investment and interest rate in the short run, in themedium run.Answer:A decrease in autonomous spending shifts the AD curve to the left. The AS curve does notshift in the short run. There are two underlying forces for the shift of AD curve: the IS curveshifts to the left due to a lower consumer confidence. This tends to de
1 Multiple Choice 1. If a Hong Kong construction company hire local Chinese worker to built a road in mainland China, this activity would be A) fully included in Mainland GNP B) fully included in Mainland GDP. C) excluded from Hong Kong GNP.
ring-œ œ ing, œ G sweet - ly œ D ring-œ œ ing, œ & ## D Ding, . dong, . G ding, . D dong, . G ding, . D dong. . &44 Hah w Mm Ó Hah #w Mm Ó All exercises in this book should be sung starting with the notes shown and then progressively raising the notes in the exercise by a half step on each repetition. For example .
white shadow with here and there a last winking light; ahead of them a dark and silent and cold ocean. There was a sudden clang. uDong dong. Dong-dong. Dong-dong. Dong!" The metal clapper of the great ship's bell struck out 11.30. Mindful of the warnings, Fleet strained his eyes, searching the darkness for the dreaded ice.
O'er hill and dale, telling their tale. Gaily they ring, while people sing Songs of good cheer, Christmas is here. Merry, merry, merry, merry Christmas. On, on they send, on without end, Their joyful tone, to every home. Ding dong ding dong! Bohm! The Work of Christmas Dan Forrest (b. 1978) When the song of the angels is stilled,
Ding Dong, Your Opinion is Wrong . ADVANCE Creative Writing 2017 Anthology . 3-11 12-21 22-28 29-33 34-39 40-47 48-52 53-62 63-71 72-81 82-87 Ashley Belcher
CURRICULUM VITAE Ruobing DONG 1 Ruobing Dong Department of Physics and Astronomy Phone: 250-721-7725 University of Victoria Fax: 250-721-7715 . University of California, Berkeley 2013 2016 x Summer Associate, McKinsey & Company, Beijing 2013 Education x Princeton University, Princeton, USA Ph.D., Astrophysics, Sep. 2013 x Peking University .
Test Blueprint 10 Preparing to Write Items 11 Description of Multiple-Choice Items 12-15 Multiple-Choice Item Writing Guidelines 16-18 Guidelines to Writing Test Items 19 Sample Multiple-Choice Items Related to Bloom’s Taxonomy 21-23 More Sample Multiple-Choice Items 24-25 Levels of Performance and Sample Prototype Items 26 Good versus Poor Multiple-Choice Items 27-28 Activity: Identifying .
Developing multiple choice and other objective style questions 4 2. Writing multiple choice questions THE FORMAT of a multiple choice question Multiple choice questions are the most commonly used format for presenting objective-style questions. A multiple choice question consists of two parts ñ A stem and several options or alternatives.
50 multiple choice. 5. field test 40 multiple choice field test 46 ITEMS/40 POINTS 45 ITEMS/40 POINTS 55 ITEMS/50 POINTS 45 ITEMS/40 POINTS. 12 Students compose two essays one, for each of. two writing prompts. 40. multiple choice. 5. field test. 49. multiple choice. 1. open ended. 6. field test 50 multiple choice. 5. field test 40 multiple .
