FINAL EXAM

MACROECONOMICS
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I. PART 1 (6 POINTS):
1. The law of one price states that
a. a good must sell at the price fixed by law.
b. a good must sell at the same price at all locations.
c. a good cannot sell for a price greater than the legal price ceiling.
d. domestic producers of a good are guaranteed a subsidy by law.
2. In late 2005, you could purchase about 16,000 VND for a dollar. In late 2014 you
could purchase about 21,300 VND for a dollar. These exchange rates are given in a. real
terms and over this period the VND appreciated.
b. real terms and over this period the VND depreciated.
c. nominal terms and over this period the VND appreciated.
d. nominal terms and over this period the VND depreciated.
3. If policymakers expand aggregate demand, then in the long run
a. prices will be higher and unemployment will be lower.
b. prices will be higher and unemployment will be unchanged.
c. prices and unemployment will be unchanged.
d. None of the above is correct.
4. In the short run an increase in government expenditures
a. raises the price level, but not real GDP.
b. raises real GDP, but not the price level.
c. raises real GDP and the price level.
d. raises neither real GDP nor the price level.
5. If policymakers decrease aggregate demand, the price level
a. falls, but unemployment rises.
b. and unemployment fall.
c. and unemployment rise.
d. rises, but unemployment falls.
6. In December 1999 people feared that there might be computer problems at banks as
the century changed. Consequently, people wanted to hold relatively more in currency
and relatively less in deposits. In anticipation banks raised their reserve ratios to have
enough cash on hand to meet depositors' demands. These actions by the public
 a. would increase the money multiplier. If the Central bank wanted to offset the effect
of this on the size of the money supply, it could have sold bonds.

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b. would increase the money multiplier. If the Central bank wanted to offset the effect
of this on the size of the money supply, it could have bought bonds.
c. would reduce the money multiplier. If the Central bank wanted to offset the effect
of this on the size of the money supply, it could have sold bonds.
d. would reduce the money multiplier. If the Central bank wanted to offset the
effect of this on the size of the money supply, it could have bought bonds.

7. Hoang saves a small amount of his breakfast allowances everyday for his future
usage. Which of the money’s function is described in this case?
a. medium of exchange.
b. a unit of account.
c. a store of value.
d. liquidity.
8. Tom loses his job and immediately begins looking for another. Other things the same,
the unemployment rate
a. increases, and the labor-force participation rate decreases.
b. increases, and the labor-force participation rate is unaffected.
c. is unaffected, and the labor-force participation rate increases.
d. decreases, and the labor-force participation rate is unaffected.
Use the following data for questions 9-13
Table 1: The Macroeconomics Indicators of Vietnam period 2015-2018
Year 2014 2015 2016 2017 2018 Bas Unit
e
year

GPDn 186.205 193.241 205.276 223.78 245.214 Billion

USD

GDPr 144.835 154.509 164.105 175.284 187.687 201 Billion

0 USD

CPI (annual 104.09 100.63 102.66 103.53 103.54 201

average) 0

Unemploym 2.10 2.33 2.30 2.24 2.19 %

en t rate
 Labor force 53,748. 53,984. 54,445. 54,823. 55,354. Thousa
at 15 years 0 2 3 8 2 nd s
of age and
above

(Source: General Statistics office of Vietnam, retrieved from

https://gso.gov.vn/Default_en.aspx?tabid=766 on June 13, 2020)
9. What is GDPd of 2016?
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a. 125.09
b. 127.67
c. 128.56
d. 130.65
10. What is the economic growth rate of 2018 (compare to 2017)?
a. 6.68
b. 6.21
c. 6.81
d. 7.08
11.What is the inflation rate of 2017 (compare to 2016) if CPI is used?
a. 3.32
b. 0.01
c. 0.85
d. 2.02
12.The number of unemployed people in 2015 is (approximately):
a. 1252.25
b. 1257.83
c. 1212.26
d. 1228.05
13.The number of employed people in 2014 is (approximately):
a. 52,619.29
b. 52,726.37
c. 53,193.06
d. 54,141.94
14. An is not working and is currently not looking for work. The BLS would count An :
a. As unemployed and in the labor force
b. As unemployed, but not in the labor force
 c. in the labor force, but not as unemployed
d. neither as unemployed nor in the labor force
15. The BLS reported that in 2018, the US’s adult population was 6712 million of
people, the labor force was 4576 million, and the number of people employed was 4276
million. According to these numbers, the US labor-force participation rate and
unemployment rate were about:
a. 59,5%; 4,5%
b. 59,5%; 6,6%
c. 68,2%; 4,5%
d. 68,2%; 6,6%
16.If inflation is less than expected,

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a. Debtors receive a higher real interest rate than they had anticipated
b. Debtors pay a higher real interest rate than they had anticipated
c. Creditors pay a higher real interest rate than they had anticipated
d. Both a and c are correct
17.A country has a trade deficit. Which of the following must also be true?
a. net capital outflow is negative and domestic investment is larger than saving
b. net capital outflow is negative and saving is larger than domestic investment
c. net capital outflow is positive and domestic investment is larger than saving
d. net capital outflow is positive and saving is larger than domestic investment
18. Who below will feel happy when Vietnamese currency (VND) depreciates in the
exchange market?
a. Vietnamese students who learn in the USA.
b. Truong Hai Car Corporation imports steel from Korea.
c. A French company exports wine to Vietnam
d. A Russian company imports seafood from Vietnam
19.To decrease the money supply, the Fed can:
a. Buy government bonds or increase the discount rate
b. Buy government bonds or decrease the discount rate
c. Sell government bonds or increase the discount rate
d. Sell government bonds or decrease the discount rate
20.When a country's central bank increases the money supply, its
a. Price level rises and its domestic currency appreciates relative to other currencies
in the world
b. Price level rises and its domestic currency depreciates relative to other
currencies in the world
 c. Price level falls and its domestic currency appreciates relative to other currencies
in the world
d. Price level falls and its domestic currency depreciates relative to other currencies
in the world
21.The aggregate quantity of goods and services demanded changes as the price level
rises because:
a. Real wealth falls, interest rates rise, and the dollar appreciates
b. Real wealth falls, interest rates rise, and the dollar depreciates
c. Real wealth rises, interest rates fall, and the dollar appreciates
d. Real wealth rises, interest rates fall, and the dollar depreciates
22.Which of the following will reduce the price level and the output in the short run?
a. an increase in the money supply
b. a decrease in the money supply

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c. an increase in oil prices
d. technical progress
23.An increase in the price of dairy products produced domestically will be reflected in:
a. Both the GDP deflator and the consumer price index
b. Neither the GDP deflator nor the consumer price index
c. The GDP deflator but not in the consumer price index
d. The consumer price index but not in the GDP deflator
24.The local VinFast dealership had an increase in inventory of 25 cars in 2018. In
2019, it sold all 25 cars. Which of the following statements is correct?
a. The full value of the increased inventory would be counted as part of GDP in
2018, and the value of the cars sold in 2019 would not cause 2019 GDP to increase. b.
The value of the increased inventory would not affect 2018 GDP; instead, the full value
of the inventory would be counted as part of 2019 GDP.
c. The value of the increased inventory would be counted as part of 2018 GDP and
the value of the cars sold in 2019 would increase 2019 GDP.
d. One-half of the value of the increased inventory would be counted as part of 2018
GDP and the other one-half of the value would be counted as part of 2019 GDP.

II. PART 2 (3 POINTS):

In an economy, we suppose:
C=300+0,7Y; I=500; G=400; X=300; M=0,2Y; t=20%.
Find:
1. The equilibrium output
2. The net export of this country and comment on the status of its trade balance. 3.
From the outcome of question (1), Government increases their expenditure extra 200,
including the increase in goods and services purchase of 120, the increase in
unemployment benefit of 80. We assume that the unemployed people will use this sum
of money to buy domestically-produced foods. Simultaneously, the marginal
consumption of the unemployed is the same as the overall marginal consumption. Find
the new equilibrium output.

III. PART 3 (1 POINTS):

Since the beginning of 2020, the Covid 19 pandamic has caused severe consequences for
countries all over the world, including Vietnam. To your opinion, how this pandamic
would:
1. Impact on the aggregate demand of Vietnam (e.g. which components)?
2. Impact on the short-run aggregate supply of Vietnam?

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Note:
▪ Closed book exam
▪ Exam paper return
▪ Proctors are not permitted to provide any additional explanation

APPROVAL OF DEAN LECTURER

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