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    Guc 57 56 21578 2022-06-21T23 25 51

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    Mariam Mhamoud
    This document contains a quiz for a macroeconomics course taught by Professor Christian Schubert. The quiz has multiple choice questions about concepts like fiscal policy, government spending multipliers, taxes, sovereign default, the size of governments over time, and the effects of supply and demand shifts on prices. It also has a problem question asking students to calculate multipliers and GDP increases based on an initial stimulus amount, with and without a new income tax.

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    Guc 57 56 21578 2022-06-21T23 25 51

    Uploaded by

    Mariam Mhamoud
    14 views3 pages
    This document contains a quiz for a macroeconomics course taught by Professor Christian Schubert. The quiz has multiple choice questions about concepts like fiscal policy, government spending multipliers, taxes, sovereign default, the size of governments over time, and the effects of supply and demand shifts on prices. It also has a problem question asking students to calculate multipliers and GDP increases based on an initial stimulus amount, with and without a new income tax.

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    it is quiz for macro

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    GUC_57_56_21578_2022-06-21T23_25_51

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    This document contains a quiz for a macroeconomics course taught by Professor Christian Schubert. The quiz has multiple choice questions about concepts like fiscal policy, government spending multipliers, taxes, sovereign default, the size of governments over time, and the effects of supply and demand shifts on prices. It also has a problem question asking students to calculate multipliers and GDP increases based on an initial stimulus amount, with and without a new income tax.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    14 views3 pages

    Guc 57 56 21578 2022-06-21T23 25 51

    Uploaded by

    Mariam Mhamoud
    This document contains a quiz for a macroeconomics course taught by Professor Christian Schubert. The quiz has multiple choice questions about concepts like fiscal policy, government spending multipliers, taxes, sovereign default, the size of governments over time, and the effects of supply and demand shifts on prices. It also has a problem question asking students to calculate multipliers and GDP increases based on an initial stimulus amount, with and without a new income tax.

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    Faculty of Management Technology Economics B Department

    Macroeconomics (ECON403) S21 Prof. Christian Schubert

    Quiz Two

    Name: ____________________________________________________________________

    ID: ______________________ Tutorial Number: ______________________

    (I) Solve all of the following MCQs in the below table:

    (1) Contractionary fiscal policy is typically required to…


    (a) Close an inflationary gap
    (b) Annoy people
    (c) Close a recessionary gap
    (d) Increase government’s revenues
    (e) None of the above.

    (2) “Every rise in government spending is always exactly offset by a fall in private
    consumption!” That claim…
    (a) Is correct
    (b) Is wrong
    (c) Is wrong if initially, the economy has underemployed resources
    (d) Is wrong if initially, the economy operates above potential output
    (e) None of the above

    (3) Taxes…
    (a) Reduce the size of the multiplier
    (b) Increase the size of the multiplier
    (c) Reduce the size of the multiplier, but only if the stimulus comes from an increase in
    G
    (d) Only affect the direction of the multiplier
    (e) None of the above.

    (4) “Sovereign default”, that describes a situation where…


    (a) a government refuses to service its outstanding debt
    (b) a private firm refuses to service its outstanding debt
    (c) a private household refuses to service its outstanding debt
    (d) historically, a king or queen misses an appointment
    (e) None of the above.
    Faculty of Management Technology Economics B Department
    Macroeconomics (ECON403) S21 Prof. Christian Schubert

    (5) Over the last 100 years, governments around the world…
    (a) Became smaller and smaller
    (b) Stayed roughly the same, in terms of size
    (c) Became more and more efficient
    (d) Became larger and larger
    (e) None of the above

    (6) After the pandemic is over, prices would rise if…


    (a) Falling demand meets increased supply
    (b) Rising demand meets lower supply
    (c) Constant demand meets constant supply
    (d) Rising demand meets rising supply
    (e) None of the above

    Question Answer
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    Faculty of Management Technology Economics B Department
    Macroeconomics (ECON403) S21 Prof. Christian Schubert

    (II) Problem Questions

    Assuming an MPC of 0.7 and an initial stimulus of $40 billion, please calculate the multiplier
    and the total increase in GDP. Now, given the same initial stimulus, calculate again the
    multiplier and the total increase in GDP if the government imposes a 20% income tax.

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