If AD is....... Y = 4 (Ao - P/5) and AS is... Y = 12 P...

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If AD is....... Y = 4 (Ao - P/5) and AS is... Y = 12 P Ao = Co - mpc To + lo + Go + Xo - Mo = 750 mpc = 0.8 Part 1: The Equilibrium price level (Pe1) Part 2: The Equilibrium National Income (Ye1) Suppose Government Spending increases by 50 Given the change in government spending: Number Number Part 3: What is the new equilibrium price level (Pe2) Part 4: What is the new equilibrium national income (Ye2) Number Number Starting again at initial equilibrium, suppose now lump sum taxes are increased by 35 Part 5: What is the new equilibrium price level (Pe3) Part 6: What is the new equilibrium national income (Ye3) Number Number For the following table calculate the government surplus/deficit at each year and calculate the total government debt. (Ensure you use negative signs where appropriate when entering your answers) Q2 Cumulative Government Year Taxes Government Spending Surplus/ Debt Deficit (-) (Don't use negative sign) 60 60 130 Number Number 2 70 150 Number Number 3 80 60 4 90 90 160 Number Number 165 Number Number 5 100 175 Number Number Using the information below, answer the following questions on money: Currency in circulation: coins paper money Chequable deposits Deposits at trust and mortgage loan companies, credit unions Money market mutual funds = 1,812 8,349 = = 94,588 = 45,213 and deposits at other = 9,179 institutions Personal chequable deposits and non personal notice deposits Part 1: The value of 'M1+' is: Number Part 2: The value of 'M2' is: Number Part 3: The value of 'M2+' is: Number = 12,431 The Bank of Mount Royal, a Canadian Bank, starts with a zero balance sheet below. The bank reserve ratio is 18%. (ignore all other items.) Ms. Clubmed returns from sabbatical in Outer Mongolia and deposits 41,500 Canadian in the Bank of Mount Royal. Bank of Mount Royal Liabilities Assets Reserves Loans & Securities Deposits_ After Ms. Clubmed's transaction with the Bank of Mount Royal and before any subsequent transactions find each of the following: Part 1) The change in Reserves is Number Part 2) The change in Deposits is Number Part 3) The change in Loans &/or Securities is Number Part 4) The bank's desired reserves are Number Part 5) The bank's actual reserves are Number Part 6) The bank's excess reserves are Number Part 7) The maximum this bank can lend is Number Q4 Using the data in the table below, answer the following questions. (Hint: draw a graph when possible) Money Demand Interest Rate% (billions of dollars) 14 140 13 160 12 180 11 200 10 240 9 300 8 360 7 440 6 540 Q6 Assume that the money supply is equal to 200 (do not use % signs in your answers) Part 1: What is the equilibrium rate of interest? Number Part 2: Assume that the Bank of Canada buys bonds and increases the money supply to 360 What is the equilibrium rate of interest? Number Part 3: A fall in income causes the demand for money to Click for List by 60 billion. If the money supply is 120, what is the equilibrium rate of interest? Number Part 4: Assuming the change in part 3, if money supply is 380, what is the equilibrium rate of interest? Number Part 5: An increase in income causes the transaction demand for money to Click for List by 40 billion at each interest rate. (Assume the change in part 3 did not occur. Given a money supply of 200, what is the equilibrium rate of interest? Number Part 6: Given the change in part 5, if money supply is 340, what is the equilibrium rate of interest? Number Using the following table, calculate the missing exchange rates: Q7 Country Currency U.S.A. Dollar Britain Pound Number France Euro 0.2125 Price of one unit of foreign currency in Canadian dollars 1.4475 Price of one Canadian dollar in terms of foreign currency Number 0.525 Number Japan Yen Number 121.9425 Mexico Peso 0.015 Number Assume the exchange rate was fixed at 1 Canadian dollar for 1 American dollar. Would the following events cause pressure on the Canadian dollar to Appreciate or Depreciate? Canadians are crossing the border to purchase their new cars in the United States (Click for List) (Click for List) Appreciate Depreciate Q8 Assume the exchange rate was fixed at 1 Canadian dollar for 1 American dollar. Would the following events cause pressure on the Canadian dollar to Appreciate or Depreciate? A rise in the American rate of interest to a level substantially higher than that in Canada (Click for List) Q9 If AD is....... Y = 4 (Ao - P/5) and AS is... Y = 12 P Ao = Co - mpc To + lo + Go + Xo - Mo = 750 mpc = 0.8 Part 1: The Equilibrium price level (Pe1) Part 2: The Equilibrium National Income (Ye1) Suppose Government Spending increases by 50 Given the change in government spending: Number Number Part 3: What is the new equilibrium price level (Pe2) Part 4: What is the new equilibrium national income (Ye2) Number Number Starting again at initial equilibrium, suppose now lump sum taxes are increased by 35 Part 5: What is the new equilibrium price level (Pe3) Part 6: What is the new equilibrium national income (Ye3) Number Number For the following table calculate the government surplus/deficit at each year and calculate the total government debt. (Ensure you use negative signs where appropriate when entering your answers) Q2 Cumulative Government Year Taxes Government Spending Surplus/ Debt Deficit (-) (Don't use negative sign) 60 60 130 Number Number 2 70 150 Number Number 3 80 60 4 90 90 160 Number Number 165 Number Number 5 100 175 Number Number Using the information below, answer the following questions on money: Currency in circulation: coins paper money Chequable deposits Deposits at trust and mortgage loan companies, credit unions Money market mutual funds = 1,812 8,349 = = 94,588 = 45,213 and deposits at other = 9,179 institutions Personal chequable deposits and non personal notice deposits Part 1: The value of 'M1+' is: Number Part 2: The value of 'M2' is: Number Part 3: The value of 'M2+' is: Number = 12,431 The Bank of Mount Royal, a Canadian Bank, starts with a zero balance sheet below. The bank reserve ratio is 18%. (ignore all other items.) Ms. Clubmed returns from sabbatical in Outer Mongolia and deposits 41,500 Canadian in the Bank of Mount Royal. Bank of Mount Royal Liabilities Assets Reserves Loans & Securities Deposits_ After Ms. Clubmed's transaction with the Bank of Mount Royal and before any subsequent transactions find each of the following: Part 1) The change in Reserves is Number Part 2) The change in Deposits is Number Part 3) The change in Loans &/or Securities is Number Part 4) The bank's desired reserves are Number Part 5) The bank's actual reserves are Number Part 6) The bank's excess reserves are Number Part 7) The maximum this bank can lend is Number Q4 Using the data in the table below, answer the following questions. (Hint: draw a graph when possible) Money Demand Interest Rate% (billions of dollars) 14 140 13 160 12 180 11 200 10 240 9 300 8 360 7 440 6 540 Q6 Assume that the money supply is equal to 200 (do not use % signs in your answers) Part 1: What is the equilibrium rate of interest? Number Part 2: Assume that the Bank of Canada buys bonds and increases the money supply to 360 What is the equilibrium rate of interest? Number Part 3: A fall in income causes the demand for money to Click for List by 60 billion. If the money supply is 120, what is the equilibrium rate of interest? Number Part 4: Assuming the change in part 3, if money supply is 380, what is the equilibrium rate of interest? Number Part 5: An increase in income causes the transaction demand for money to Click for List by 40 billion at each interest rate. (Assume the change in part 3 did not occur. Given a money supply of 200, what is the equilibrium rate of interest? Number Part 6: Given the change in part 5, if money supply is 340, what is the equilibrium rate of interest? Number Using the following table, calculate the missing exchange rates: Q7 Country Currency U.S.A. Dollar Britain Pound Number France Euro 0.2125 Price of one unit of foreign currency in Canadian dollars 1.4475 Price of one Canadian dollar in terms of foreign currency Number 0.525 Number Japan Yen Number 121.9425 Mexico Peso 0.015 Number Assume the exchange rate was fixed at 1 Canadian dollar for 1 American dollar. Would the following events cause pressure on the Canadian dollar to Appreciate or Depreciate? Canadians are crossing the border to purchase their new cars in the United States (Click for List) (Click for List) Appreciate Depreciate Q8 Assume the exchange rate was fixed at 1 Canadian dollar for 1 American dollar. Would the following events cause pressure on the Canadian dollar to Appreciate or Depreciate? A rise in the American rate of interest to a level substantially higher than that in Canada (Click for List) Q9