（勤奋.求是.创新.

奉献）

2021～2022 Academic Year 2nd Semester Exam Paper

Teacher：QU Dawei

Name Jenbekova Mahabbat Student ID 037120106

《Macroeconomics》Final Exam Paper A

（Time: 120 minutes）
Question number I II III IV Total score
Question points 40 20 20 20 100

score

Part one：Multiple-choice questions (40 points)

For the following select the best answer choice and record your choice on the
answer sheet provided.

1 2 3 4 5 6 7 8 9 10

B C B C B D C D C D

11 12 13 14 15 16 17 18 19 20

B A A A D C C B A C

1. Which of the following is not a project of Macroeconomics research?

(A) The impact of the Covid-19 epidemic on Shanghai's economic growth in 2022.
(B) Government gradually reduced subsidies for new-energy vehicle companies.
(C) The unemployment rate of US kept rising after 1st quarter in 2020.
(D) Inflation hurt the purchasing power of middle-class consumers.

2. Which of the following is a normative economics problem?

(A) The introduction of the minimum wage law will cause some workers to lose their
Jobs.
(B) Subsidies or tax incentives will encourage companies to increase investment.
(C) Government should raise tariffs to protect domestic workers.
(D) A large number of cheap imports entering the domestic market will increase the
unemployment of the corresponding industrial workers in the country.

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3. Which of the following transactions would not be counted in China’s GDP?
(A) Ventilators and masks exported to European and American countries.
(B) Unemployment insurance benefits provided by the government to workers who
have lost their jobs due to the epidemic.
(C) Brokerage fees charged by real estate agents for second-hand housing transactions
(D) Government paid salaries for public-college teachers

4. Fu-Yao glass company (a Chinese firm) planned to move a manufacturing plant

from China to US. How will this affect GDP and GNP of China? (other things
unchanged)
(A) GDP will rise, GNP will fall.
(B) GDP will fall, GNP will rise.
(C) GDP will fall, GNP will keep unchanged.
(D) GNP will fall, GDP will keep unchanged.

5. Which of the following are not examples of consumption?

(A) Families buy fish, meat, eggs, milk and other food.
(B) Families buy houses.
(C) Families buy refrigerators, washing machines, TVs.
(D) Buy clothing for family members.

6. Which of the following resources are not examples of capital?

(A) The company built an 88-storey office building.
(B) Family built a house
(C) A business buys a mainframe computer to use as a server.
(D) People buy stocks of the Apple company.

7. Which of the following items are not included in Government purchase

expenditure?
(A) Salaries of the government officials.
(B) Department of Defense procures drones and bombers.
(C) The government's living care allowance for the disabled.
(D) Government building maintenance costs.

8. Which of the following items are not included in Government transfer payment?
(A) Social security benefits
(B) Interest paid on the government debt.
(C) Unemployment benefits
(D) Salaries of the public hospital doctors and nurses.

9. If the consumer price index (CPI) increases by 6 percent and your nominal income
increases by 10 percent, your real income has approximately
(A) increased by 10 percent.
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(B) increased by 6 percent.
(C) increased by 4 percent.
(D) decreased by 6 percent.
10. Suppose country S has a total population of 5,000,000. Total employed adults are
3,600,000 while total unemployed adults are 400 ,000. What is the unemployment
rate?
(A) 9%
(B) 10%
(C) 8%
(D) 11.1%

11. For years you work as a bus driver, and one day you are replaced by Autopilot.
What type of unemployment is this?
(A) Cyclical
(B) Structural
(C) Frictional
(D) Seasonal

12. To calculate the GDP deflator, you must

(A) divide nominal GDP by the real GDP
(B) divide real GDP by the nominal GDP
(C) divide nominal GDP by the CPI
(D) divide nominal GDP by the PPI

13. In a given period, the average price level in the country of Sherwood tripled, and
Robin’s income increased from $30,000 to $60,000. What happened to Robin’s
nominal and real income?
Nominal Income Real Income
(A) Increased decreased
(B) decreased increased
(C) Increased increased
(D) decreased decreased

14. Which of the following is true about the consumption function?

(A) The slope is equal to the MPC.
(B) The slope is equal to the MPS.
(C) The slope is equal to MPC + MPS
(D) It shifts downward when consumer wealth increases in value.

15. Which of the following is the source of the supply of loanable funds?
(A) The stock markets
(B) Investors
(C) Banks and mutual funds
(D) Savers
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16. Assume commercial banks save no excess reserves and the reserve requirement is
20 percent. How much money is created in new loans from all banks after this bank
receives a deposit of $1000?
(A) $800
(B) $1,000
(C) $4,000
(D) $5,000

17. Which of the following is the most likely to be a deterrent to growth in the
economy?
(A) Spending on education and training
(B) Increases in capital
(C) Increases in the interest rate
(D) Expenditures on research and development

18. If the economy is operating below full employment, which of the following will
have the greatest positive impact on real GDP?
(A) The government decreases spending with no change in taxes
(B) The government increases spending with no change in taxes
(C) The government decreases spending and matches it with an increase in taxes.
(D) The government increases spending and matches it with a decrease in taxes.

19. Which of the following is a tool used by the Fed to increase the money supply?
(A) A lower discount rate
(B) Selling Treasury securities to commercial banks
(C) A higher reserve ratio
(D) A higher reserve ratio

20. Which of the following is true when expansionary fiscal and expansionary
monetary (easy money) policy are used at the same time?
(A) Unemployment will increase
(B) Real GDP will decrease
(C) Interest rates will remain relatively constant
(D) Inflation will decrease dramatically.

Part two：Ture or False questions (20 points)

Read carefully and decide whether each of the following is true or false and record
your decision (“T” or “F”) on the answer sheet provided.

1 2 3 4 5 6 7 8 9 10

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 F T T T T F F F T T

1. GDP is one of the most important stock variables in economics.

2. The amount of the used car transaction itself (excluding taxes and fees) should not
be included in the calculation of GDP.
3. Tires must be intermediate products.

4. Japan's GNP in 2019 was greater than its GDP, which means that the value of
products and services produced abroad by Japanese nationals in that year was greater
than the value of products and services produced in Japan by foreign nationals.

5. Venezuela's GDP in 2000 was only 79.6 billion bolivars (the legal currency of
Venezuela). By 2010, its GDP had increased to 1,020 billion bolivars. It is thus judged
that Venezuela had achieved rapid economic growth during the 10 years.

6. the Equilibrium national income is always equal to the potential national income.

7. A person is considered to be unemployed if he or she did not work in the past week
and did not look for work in the past four weeks.

8. Economic fluctuations follow a regular, predictable pattern.

9. Fiscal policy are decisions about the government’s budget—how much the
government spends and how much tax revenue it collects.

10. When the reserve ratio falls (keeping other things unchanged), the money
multiplier will become larger.

Part three：Calculation questions (20 points)

1. According to the National Bureau of Statistics of China, in 2020, China's

Household Consumption Expenditure (unit: 100 million yuan) was 387185.8, the
Government purchased expenditure was 173625.4, the Gross Capital Formation was
439550.3, and the Net export of goods and services was 25266.9.
The GDP index, calculated using 1978 as a base period of 100, was 4011.2 in 2020,

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compared to 3923.3 in 2019.

Please calculate based on the above data:

(1) China’s GDP in 2020 (5 points)
(2) China’s economic growth rate in 2020 (5 points)
1) GDP = C+G+I+NX = 387185.8 + 173625.4 + 439550.3 + 25266.9 = 1025628,4

2) GDP% = GDP(present)-GDP(past)/GDP(past)x100% = 4011.2 – 3923.3/3923.3

= 2.24%

2. Suppose the consumption function of country A is ( is the

disposable income). Investment expenditure is 1500. The government purchase

expenditure is 1500. The government transfer payment is 800. Tax is 2050.
Please try to calculate:
(1) the equilibrium national income (4 points)

(2) the government purchase multiplier (3 points)

(3) the tax multiplier (3 points)

Answer:
1) The equilibrium national income
Y = 1000 + 0.8Y + I
Y – 0.8Y = 1000 + 1500
0.8Y = 2500
Y = 2500/0.8 = 3 125
2) The government purchase multiplier
Y/G=2.08
3) The tax multiplier

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 Y/T=3125/2050=1.54

Part four：Free to answer questions (20 points)

1. What are the shortcomings of GDP as a measure of real well-being? (8 points)

1. Nonmarket Goods

Non-market production refers to goods and services that are produced for private
consumption and for which exists no official record of production. For example,
consider people who grow their own food or manufacture their own electricity.

Similar to the black market economy, it is almost impossible to estimate the amount
of this sector. The sector’s size also varies greatly between countries. For example,
the GDP of countries with many subsistence farmers will be understated, whereas in
economies with less subsistence farming will more accurately record GDP.

2. Underground Economy

The underground economy refers to monetary and barter transactions that are not
officially counted in GDP and are often used to support trade in illegal goods and
services (e.g., drugs, weapons, prostitution, etc.).

3. Quality of the Environment

Often, producers can increase their output by polluting or damaging the environment.
In developed countries, production is better regulated, and companies that violate
environmental laws can face severe fines and penalties.

However, many developing economies rely on high output to support the growth of

their own economies and are less concerned with environmental issues. Nonetheless,
there is a consensus that such environmental damage should be counted against a
country’s GDP since it is not sustainable production and may impact future growth.

4. Leisure Time
GDP does not take into account leisure time. The GDP per capita in the U.S. is higher
than the GDP per capita in Germany. This does not prove that the U.S. standard of

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living is higher, because it is also true that the average American worker works
several hundred hours more per year than the average German worker. The calculation
of GDP does not take into account the extra weeks of vacation for German workers.

2. As you know, economic growth in major economies has slowed since the onset of
the Covid-19 pandemic. The global economy is experiencing “a bitter winter”.
Based on the macroeconomic principles you have learned in this course, what
macroeconomic policies do you think governments should adopt to help their
economies (and even the global economy) to recover? explain the reasons. (12 points)

In the coming years, the loss in production and employment caused by the
pandemic was dramatic. Developing economies suffered greater losses because they
had much less access to vaccines and fewer pandemic-related support packages.

The main reasons for the damage from the pandemic include the prospect of weak
labor market recovery in emerging economies and severe educational disruptions over
the past two years in both developed and developing countries. Policymakers must
take swift action to repair the damage from the crisis and prevent economic output
from declining due to the loss of human capital.

To minimize permanent damage, countries must quickly assess learning gaps and
take the necessary steps to help students. This could include, for example, additional
tutoring or extending the school year.

In addition, measures used during the pandemic to support companies and workers
that helped limit the damage from the pandemic, such as loan guarantees and job
retention measures, will need to be phased out when the economic recovery
strengthens. This would help avoid holding back the reallocation of workers and
resources to their most productive use when the pandemic recedes, and also help
accelerate productivity growth.

Instead, policies can be refocused on helping people adjust to changes in the labor
market, for example, through targeted job search programs and additional support for
learning new skills.

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