Intermediate Macroeconomics I
Economics
Q1. True/False
(1) If the correlation coefficient between x and y is –1, then x and y are
uncorrelated.
(2) The value added of a firm in US owned by a Canadian is included in the GDP
of US but not included in the GNP of Canada.
(3) Money supply is a procyclical and leading variable.
(4) Other things being equal, if the real GDP is overestimated, then the implicit
GDP price deflator is under-estimated.
(5) Net export cannot be negative because a country cannot export negative
amount of goods and services.
Q2. National Income Accounting
Consider an economy with 2 goods. There is a government, 2 firms and 2
consumers.
The income and expenditure flows in this economy in year 2000 are as follows:
Firm 1
Firm 2
Output of good 1
Price of good 1
= ? units
= $ 1
Output of good 2
Price of good 2
= 3 units
= $ ?
Interest payment
= $ 1
Interest payment
= $ 0.5
Wage payment
= $ 1
Wage payment
= $ 3
Tax payment
= $ 0.5
Tax payment
= $ 1
Consumer 1
Consumer 2
Wage income
Interest income
Profit income
= $ 6
= $ 1.5
= $ 0
Wage income
Interest income
Profit income
= $ 0
= $ ?
= $ ?
Expenditure on good
1
= $ 4
Expenditure on good
1
= $ 0
Expenditure on good
2
= $ ?
Expenditure on good
2
= $ 3
Tax payment
= $ 0.5
Tax payment
= $ ?
(1) The wage payment from the government to consumer 1 is
$_______________ .
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