1. In the IS-LM model, analyze the effects of increased optimism among banks on all the endogenous variables (Y, r, I, S, C, T, L1, L2).

Suppose that Meghan earns $2,000 this month, and $2,200 next month
with a utility function over consumption in these two periods given
by U(C1, C2) = C1C2, where MUC1 = C2 and MUC2 = C1. Suppose that
the deposit interest rate is rL = 1%, while the credit interest
rate is rB = 2% + x%, where x is 4.
a) Draw a graph with Meghan’s budget constraint for consumption in this month
vs. next month.

b) Will Meghan borrow or save, or neither?
c) How will your answer change if the interest rates rL and rB both increase by 5
percentage points?

In the U.S. agribusiness industry the farmer is a price taker and the businesses selling to and buying from farmers are price makers. True or False?

Labour Market – Definition & measurement of:

•    Unemployment rate

•    Participation rate

•    Involuntary part-time rate

•    Working-age population

• Labour force

•   Employment

• Unemployment Employment-population ratio

• Types of unemployment – e.g., frictional, structural, cyclical

•   Definition of full employment (Tip: full employment does not mean zero unemployment)

•   Natural rate of unemployment

•    Unemployment and the business cycle (Note: unemployment tends to rise when the economy is contracting (in recession) and fall when the economy is in an expansion.

Suppose it is mid-2007 and the stock market has been growing rapidly for the past 5 years. Some economists argue that the stock market has become “overvalued” and thus a “crash” is imminent

1. How does a rising stock market affect Aggregate Demand? Show this in an AD/AS diagram.

2. For a central bank that is trying to keep real GDP close to Potential explain what challenges are posed by a rapidly rising stock market

3. Suppose the stock market crashes how does this affect aggregate demand? Show this in an AD/AS diagram.

1. Sandra “has it all”: a handsome and successful husband, a beautiful home in the city, and healthy gorgeous twin girls, aged 5. Most importantly, she is a busy venture capitalist who invests in start up businesses. However, she is also the primary caregiver to her invalid father who refuses to move into a nursing home and lives in his own apartment across town. She is what we call a member of ‘the sandwich generation’ and needs help managing everything.

Sandra decides to advertise and interview for three different positions: 1) a personal caregiver for her father; 2) a nanny for her daughters; and 3) a personal assistant for herself. Her father is a lovely man but holds outdated opinions on a number of issues, including, sadly, Japanese, Germans and Italians. He has never forgiven them for what happened in World War Two. He wouldn’t tolerate anyone of those backgrounds being his caregiver. Sandra would like her daughters to learn Mandarin and so wants to only hire someone Chinese as her daughters’ nanny to speak to them entirely in proper and correct Mandarin. Lastly, her husband is a very jealous man and would not tolerate her having a male assistant so she must only hire a woman for that job.

What Human Rights Code issues must Sandra be aware of in both advertising and interviewing for these positions? Will she be able to hire who she wishes or will there be any HRC violations in any or all of these situations? Refer to case and statute law where appropriate in support.

Suppose you are interested in conducting an economic evaluation of two alternative treatments for diabetes. What type of analysis would be most appropriate and why? What outcomes would you consider in the analysis?

Gross Domestic Product (GDP)

• Definition

•   Calculation – Expenditure and income approaches

•   Final goods versus intermediate goods

•   Are used goods counted in GDP?

•   Are stocks and bonds (financial assets) counted in GDP?

•   How are inventories treated in GDP?

•   Calculation of real GDP & current GDP

•   Definition of the standard of living

•    Limitations of GDP per person as a measure of the standard of living – e.g., is household production included in GDP? What about underground economic activity? What about leisure and environmental quality?

Market demand curve for a pair of Cournot duopolist is given as P = 36-3Q where Q = q1 + q2. The constant per unit marginal cost is 18 for each firm. Find the best response function for each firm, the Cournot equilibrium price and market quantity. What is the Cournot Lerner Index?

1.      (True/False. Explain) Longer the duration of the loan, higher the interest rate.

2.      (True/False. Explain) higher the risk of the loan, lower the interest rate.

3.      (True/False. Explain) $1 today is worth more than $1 tomorrow.

4.      What is Initial Public Offering (IPO)? Can you buy one from another investor?

5.      What is crowdfunding?

Given recent events (Covid-19), how would answer the following claim, “Massive increases in fiscal stimulus, record deficits, and a rapid expansion of the Federal Reserve’s balance sheet will contribute to a sharply higher interest and inflation rates.”

Please explain which types of non-democratic regimes use clientelism and which ones use corporatism? Why?