Overview
- PLEASE DO APA STYLE - USE POWERPOINTS AS REFERENCE - PLEASE USE ATTACHMENT "exercise 6" FOR FULL QUESTIONS. IT HAS IMAGES I COULD NOT PASTE
BUS 724
EXERCISE 6
Total Points = 5
Section I
Use the information set out in the tables below about the economy of Athabasca.
Question 1 (1 point)
Calculate the quantity of labor employed, the real wage rate, and potential GDP.
Question 2 (1.5 points)
If the labor force participation increases, explain how employment, the real wage rate, and potential GDP change.
Section II
Question 3 (1 point)
Suppose that banks had deposits of $500 billion, a desired reserve ratio of 4 percent and no excess reserves. The banks had $15 billion in notes and coins. Calculate the banks’ reserves at the central bank.
Question 4 (1.5 points)
If the velocity of circulation is growing at 1 percent a year, the real inter- est rate is 2 percent a year, the nominal interest rate is 7 percent a year, and the growth rate of real GDP is 3 percent a year, calculate the inflation rate, the growth rate of money, and the growth rate of nominal GDP.
- PLEASE DO APA STYLE - USE POWERPOINTS AS REFERENCE - PLEASE USE ATTACHMENT "exercise 6" FOR FULL QUESTIONS. IT HAS IMAGES I COULD NOT PASTE