1.

Complete the following table and calculate the inflation rates.

  % (precise to 1 decimal point, e.g., 9.4%)

  % (precise to 1 decimal point, e.g., 9.4%)

2.

Suppose a community has a total population of 500, of which 100 are youth under the age of 16, 100 work 40 hours per week, 100 work 1-39 hours per week, 100 have been looking for work in the past four weeks, 50 are retired, 25 are college students, and 25 stay home voluntarily.

What is the labor force?   

What is the working age population?   

What is the unemployment rate?   % (e.g., 12%)

What is the labor force participation rate?   % (e.g., 12%)

3.

An economy produces only fish and oranges. The table below shows the quantity produced and their prices in 2007 and 2008. What are the nominal GDP in 2007 and 2008? And what is the real GDP in 2008 using prices in 2007? (base year = 2007)

What is the real GDP in 2008?

4.

Excess reserves refer to the remaining cash reserves financial institutions have after satisfying the reserve requirement. Suppose a bank receives one and only one cash deposit of $6,000,000, and the current required reserve ratio is 10%. What is the excess reserves?

• A.

  5,400,000

• B.

  3,600,000

• C.

  4,000,000

• D.

  4,500,000

5.Shannon made $50,000 last year and received a $10,000 raise this year for her excellence at work. With the additional income, she spent $6,000 more this year. What is the marginal propensity to consume (MPC) for Shannon?

• A. 70%

• B. 50%

• C. 60%

• D. 40%

6.In the previous question, what is Shannon's marginal propensity to save (MPS)?

• A. 40%

• B. 60%

• C. 10%

• D. 30%

7.Suppose banks keep cash reserves as much as 5% of their deposits (currency drain ratio), and the current required reserve ratio is 10%. What is the money multiplier?

multiplier = (1 + CDR) / (RRR + CDR)

• A. 7

• B. 3

• C. 6

• D. 4

8.Suppose the U.S. real GDP in 2008 is $14 trillion, price level is 2, and velocity of circulation is 4. What is the quantity of money in the economy?

• A. 28 trillion

• B. 7 trillion

• C. 14 trillion

• D. 4 triliion

Abdullah bought a car with a value of 10800 dinars through murabaha, provided that he pays the price of the car and the profits in 60 monthly installments, each of which is worth 225 dinars. Find the simple annual interest rate؟

a. 0.05

b.0.0625

please make sure to choose the correct answer 100%

Long Call on one unit of Swiss Franc. E=.985 USD/SF P=.5 US cents E= Excise Price P=premium

Find the profit and say if it is in the money, at the money or out of the money

Assuming annual interest payments and a principal value of $100, what is the value of a 4-year 6.8% coupon bond when the discount rate is i) 4.8%, ii) 6.8%, and iii) 7.1%? Show that your results are consistent with the relationship between the coupon rate, discount rate, and price relative to par value.

Cecilia is consuming her optimal consumption bundle of slices of pizza and pepsi cola cans. The marginal utility of her last slice of pizza was 75 utils, and each pizza costs $3. Her marginal utility of her last pepsi cola can was 100 utils. The price of a pepsi cola can is $_____.

Find the equilibrium price and quantity for the following related market for two goods.

(a)Qd1=840−5P1−2P2

Qs1=−60+3P1.

and

Qd2=300−P1

−3P2Qs2=−100+3P2.

(b)Qd1=2−3P1+P2

Qs1=−50+15P1.

and

Qd2=220+5P1−4P2

Qs2=−120+32P2.

IBM stock currently sells for 100 dollars per share. The implied volatility equals 20.0. The risk-free rate of interest is 4.0 percent continuously compounded. What is the value of a call option with strike price 95 and maturity 6 months? Answer should be to the nearest cent (2 decimal places).

A company issues a 10-year, 4% coupon bond with semiannual coupon payments. On release, it has a price of $90 per $100 of face value. What is the yield to maturity of this bond when it is released?  

A. 5.31%
B. 2.65%
C. 3.18%
D. 5.30%

C is incorrect. which one is correct and why?

3. James is a producer in a monopoly industry. His demand curve, total revenue, curve, marginal revenue curve and total cost curve are given as follows:

Q=100-4P

TR=25Q-0.25Q²

MR=25-0.5Q

TC=6Q

MC=6

a.How much output will James produce?

b. What price will James charge per unit of output?

c. How much profit will James make?

d. If this was a competitive firm. Calculate the profit maximizing price and quantity and compare with price and quantity under monopoly.

e. Calculate the amount of deadweight loss incurred because James is a monopolist and not perfectly competitive firm.