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Homework #1 (Deadline: 9:10 am, 10/17)

l Notice:
n Please submit your answer to Moodle by 9:10 am, 10/17. Please start as
early as possible.
n Please upload your work in a single PDF file to Moodle, and make sure
your uploaded file is clear and readable. Corrupted files will not be scored.
n In part II, please show your calculation and/or explain your answer, or no
points will be given.
n Before teaching assistants giving out the answer key, late homework will be
punished by 50% of your original scores(原始成績打五折). After that, no
more late submissions will be allowed.
n If you find the questions incomplete or you have any problem with opening
the files, please contact teaching assistants as soon as possible.

Part I. Multiple choices questions (單選題) 5 points for each

1. GDP includes which of the following purchases?
(A) A used economics textbook from the bookstore → ⼆⼿ 交易 不 在 GDP 內
(B) New equipment bought from the domestic company this year
(C) 1,000 shares of stock in a computer firm → 在 外 流通 股票 交易 不 在 GDP 內
(D) A car produced in a foreign country → 進⼝ 不 在 GDP 內
(E) Housewife worked at the home → 家庭
主婦 產值 無法 量化
Ans: B

2. Which of the following is true?

GDP (A)GNI
✗ measures the value of final goods and services produced in a country in
a given period.
neyndīrecttax
(B)The difference between NI and NNI is net direct tax.
.

(C)NI is the national income at market

X price.
X factor cost 。

(D)Wage, interest, rent, and profit are components of NI.

Ans: D

3. Which of the following is true?

(A)unemployment is identified when a worker who is not currently employed
stops searching for a job. → 要 持續 找 ⼯作 但 找 不 到 才 算
(B)Those who just graduated from school and become a housewife will
influence the unemployment rate. 不 變 皆 是 非 勞動⼒ ,

(C)an increase in the number of discouraged workers will decrease the

unemployment rate ⼈⼝ ↓ 非 勞⼒
失業 。
↑

失業率 t -

分⼦ 分⺟ 0 皆 下降
 →
監管⼈⼝ 不 在 勞動 ⼈⼝ 裡
x
(D)Prisoners in the jail are counted in the population of the working force.
Ans: C

4. According to Keynes's theory of the closed economy,

(A)National saving equals investment. deficit
(B)When public saving < 0, there is a budget surplus.
.

"
X
(C) X
"! means autonomous spending.
x in proportional tax(比例稅) than in lump-
(D)the multiplier effect will be bigger
sum tax.(定額稅) smallev '

rhfn
(E)Consumption is a function of natural output. 11T ns.
--

1 -

cityc,
Ans: A disposable ⑤
īnaome 定額 稅 ①
⼩

5. The investment spending category of GDP does not include 比例 未兌

(A)purchase of new equipment
(B)purchase of new homes
(C)the value of changes to business inventory → 存貨 變動 期 未 存 貨 若 ⼤於 期初 ,

(D)All of the above are included in GDP 代表 這 期 ⽣產 但 沒 賣

Ans: D 出去
計入 本期 GDP 的 投資
,

當中
Consider the following data that gives the quantity produced and unit price for
three different goods across two different years, to answer the next two
questions. Assume that the base year is 2015.

2015 2016
Good price quantity price quantity
A $2 250 $3 200
B $3 300 $2 400
C $4 400 $5 500

6. What was the real gross domestic product (GDP) in 2016?

(A)3,000
(B)3,600 2 X 2 0 0 +3 ✗ 400 t 4✗ 3 0 0
(C)3,900
(D)3,350 =
40 0 f / 2 0 0 fzoo 0
(E)8,550
ANS: B ⼆
3600
7. What was the gross domestic product (GDP) deflator in 2016?
(A)108.3 2016 名⽬ ⼆ 3 ✗ 200 +2 X 400 ⼗ 5 xsoo
(B)103 600 ⼗ 800
⼆
⼗ 2500 =
3900
(C)120
(D)130 2016 real ⼆
3600
(E)110
ANS: A
管
⽅ ⼆
1,083
↓ 指數化
108,3
8. The following table shows the amount of product produced in the economy in
2014 and 2015. The CPI basket includes 1 unit of A and 3 units of B. What was
the CPI of 2015?
2014 2015
Good price quantity price quantity
A $40 10 $60 12
B $10 30 $12 50
(A)135.2
(B)136.1 CPI
(C)137.1
⼆

Etrxiooltjfxoo
三 Qo X Po

(D)138.2
%
6
⼆ - _ -
X1 0 0
(E)none of the above
ANS:C = 13
7 .
1 4

9. Goods market equilibrium can be expressed by

(A) I+G = S+T Y = ct It G

(B) C+S = Y
Y C-
T Ct
- = It
G -
C -
T
(C) I+G = C+S
P
I t G T
(D) C+I+G = Y-T S -
=

Ans: A SP +7 ⼯⼗ G ⼆

10. Use the information provided below to answer question (10).

Suppose a country uses the United States' system to calculate official
unemployment statistics. At the beginning of 2022, the unemployment rate in
the country was 5%, and the unemployment was 1 million people. During 2022,
the following events occurred:
l 3 million of kids turned 15 years old, and all of them were still students
i l 100,000 unemployed people gave up looking for a job
3. l 2 million of full-time housewives decided to enter the labor market, and
half of them were hired
 !
4、 l 300,000 students gave up their studies and started to find a job, but "
of

them were not hired

5 l ,
900,000 originally employed people lost their jobs, but all of them were
still looking for jobs
令x - E -
1 9 2
⼆
0,13 1 2
What is the unemployment rate at the end of 2022?
0 = 5%
(A)7.3% 1、 population ofworkingage ↑ nonlaborforce ↑
anemployment (B)8.8% z.ci ↓ 1 0 萬 nonlaborforce 个 1 0 萬
,

1
萬⼈
0 0
,

(C)10.5% 3 nonlaborforce ↓ 200W V7 0 W E 个 loow

,
, 1 0 .

(D)13.1% 4. non laborforct ↓ 30W v7 10W E 个 10N

uǘfx
,
,

-5% Ans: D 5. E ↓ qow 0 ↑ 80W

,

新 新 100 1 t 1
1920 萬 U + 1 0 90 萬
0 0 0
E -10 -90 1 zqo
-

⼆ = -

1900 tcoo
=
⼆

萬
,

Part II. Short answer questions (50 points)

900
x= 1 The following statements are true or false? Please explain. No point will be given
without explanation.

1. In the calculation of GDP, only final goods and services are counted. As a result,
the value of intermediate goods and stocks of a company are not included in
GDP. (10 points)
In the calculation of GDP, the value of final goods and services includes the
value of the intermediate goods. Intermediate good is deducted when
calculating the GDP to avoid double counting.
Similarly, only newly issued stocks are counted in GDP.

2. The multiplier of government purchases is equal to the multiplier of

government tax reduction, and when the "! increases, the multiplier of
government spending becomes bigger. (10 points)

Y=C+I+G
Y = "# + "! (* − ,) + I + G
1 "!
Y= (/# + 0 + 1) − ,
1 − "! 1 − "!
!
The multiplier of government spending is !$%!
, and the multiplier of government

%!
tax reduction is !$%!
. So, to increase the output, the effect of increasing

government spending is better than tax reduction. Moreover, when the "!
 increases, the multiplier of government spending becomes smaller.

3. Use the information provided below to answer the question. (9 points)

The following equations refer to the good market of an economy in billions of
euros: Y-Z-zooto.sc T T ) +50 +70

Y = 2 0 0 t 0,5 Y -20 +50 ⼗ 70

/ = 200 + 0.5*&
0 = 50 Y = 3 0 0 +0.5 Y
, = 40 0.5 ㄚ = 3 00

1 = 70 Y = 60 0

C = 20 0 +0.5
(600-40)=480 ✗

Please derive output, consumption, and private saving under equilibrium.

Output=600
consumption=480
令 x-SP.SN I =
50 =

private saving=80 F G 3 0 =
-

x -

3 0 = 5 0 .
X ⼆
80
4. Use the information provided below to answer question (21 point).
Suppose that an economy produces only apples, clothes, and cars. The
quantities and the prices of these products in three successive years are given
below:

2020 2021 2022

Quantity Price Quantity Price Quantity Price
Apples 20 $10 18 $8 15 $12
Clothes 30 $5 40 $5 35 $8
Cars 8 $120 6 $130 7 $140

In the following table, use the second way of computing chained volume GDP in
Chapter 2 to complete blank A to blank G and answer the following questions.
2021 is the reference year.

The growth
Chained Chained
Nominal GDP rate of real
volume index volume GDP
GDP
2020 A ----- D F
2021 B C 100
2022 E G
Please derive blank A to G
A: 1310
B: 1124
C: -16%
D: 119.047
E: 107.2
F: 1338
G:1204.93

⼆
( 1 0 0 X (1+7,2%1)