TROY UNIVERSITY IN VIETNAM

FINAL EXAMINATION
COURSE:
MACROECONOMICS

Student Name: NGUYEN QUYNH TRANG

Class: K19C
Date of birth: 18.10.2002

I. Short Answer

1. Explain the main aims of government macro-economic policy?

2. What is the appropriate response for a recession using fiscal policy?

3. What is the appropriate response for a recession using monetary policy?

 II. Problem-solving questions
Exam 1
a. Employed: having a job working for a company or another person
b. Unemployed: a term that describes a person who could be working, and wants
to work, but is not working; to be counted as unemployed you must be part of
the eligible population, not working, and actively looking for work.
c. Not in the labor force: People who are neither working nor looking for work
d. The unemployment rate: the percentage of the labor force that is unemployed
e. The labor force participation rate: the percentage of the eligible population
that is in the labor force
f. The employment rate (employment -population ratio): the employment rate
as the employment-to-population ratio. The employment population ratio is the
best measure of labor market conditions." .This is a statistical ratio that
measures the proportion of the country's working-age population that is
employed

December 2007 June 2009 February 2020 April 2020 May 2020 January 2021
Civilian noninstitutional
population >16 233,290,000 235,695,000 259,835,000 260,045,000 260,197,000 260,849,000

Civilian labor force 153,918,000 154,730,000 165,546,000 137,224,000 156,481,000 160,161,000

Employed 146,273,000 140,003,000 158,759,000 133,403,000 137,224,000 150,031,000

Unemployed 7,645,000 14,727,000 6,787,000 3,821,000 19,257,000 10,130,000

Not in labor force 79,372,000 80,965,000 94,289,000 122,821,000 103,716,000 100,688,000

Unemployment Rate 4,96% 9,51% 4,10% 2,78% 12,31% 6,32%

Labor Force
Participation Rate 65,98% 65,65% 63,71% 52,77% 60,14% 61,40%
Employment-Population
Ratio 3,28% 6,35% 2,61% 1,47% 7,40% 3,88%

g. We have: 

Labor Force Participation Rate (LFPR) = (Labor force / Civilian

noninstitutional population) x 100%
If the answer for LFPR in December 2007 were the same as in February 2020
→ LFPR in February 2020 = 63,71%
→ Labor force = 63,71% x Civilian noninstitutional population = 165,540,878
→ Unemployed = Labor force - Employed = 6,781,878
→ The unemployment rate = 4,097%
Exam 2
Calculate GDP:

GDP = C + I + G + (X - M)
= 310 + 115 + 60 + (305 - 245) = 545

Exam 3
2. A company is growing rapidly, and is investing nearly all of its income, so
its marginal propensity to consume (MPC) is 0.85. Remembering that
MPC + MPS equals 1, we find out that the MPS is 0.15. What is the
spending multiplier in this case?

3. The GDP in Vietnam is equal to $25 millions. Company spends $7,500, and
with the spending multiplier is (?), as previously calculated in question 3.
Please calculate the actual increase in GDP and the new GDP.

4. You are given the following

information: Bank deposits (D) 350

Currency-to-deposits ratio (c)

0.20 Required reserve ratio (rr)

0.15

a) Solve for the monetary base level (B) in this economy.

b) Solve for the level of bank reserves (R) in this economy.

c) Solve for the money supply level (M) in this economy.
d) Suppose there is a sudden rise in the currency-to-deposits ratio, from the original
level of
0.2 to a new level of 0.4. If everything else remains unchanged, find the level of
monetary base needed to keep money supply fixed at the level you solved for in
part c.

e) Continue to consider c=0.4. Find the level of required reserve ratio needed to
keep the monetary base and the money supply fixed at the level you solved or in
parts a and c, respectively.

5. Using the CPI measure of the price level, which is 100 in the base year of
2001, calculate the annual inflation rates for

(a) 2002, when the index is 103.7.

(b) 2003, when the index is 105.5.

(c) 2004, when the index is 107.7.

6. Assume the current equilibrium level of income is $200 billion as compared

to the full-employment income level of $240 billion and that consumption is
the only component of aggregate expenditures that depends upon the level
of GDP. If the
 MPC is 5/8, what change in aggregate expenditures is needed to
achieve full employment?

III. Fill in the blank

1. While the study of economic activities of individuals, households, and
businesses at the sub-national level is the concern of ,
the study of economic activities at the national and global level is the
concern of .
2. When producers change their level of output, rather than price, in
response to higher or lower sales, this is called .
3. The increase in the level of production in a country or region is called
growth while improvements in diet, housing,
medical attention, education, working conditions, access to care,
transportation, communication, entertainment, etc. is called
growth.
4. The process of moving from a situation of poverty and deprivation to a
situation of increased production and plenty is referred to as
.
5. The fluctuations in the level of production, including recessions on
the one hand and booms on the other hand, is called .
6. takes the form of a commodity with intrinsic value.
7. is used as money because of government decree.
8. Currency (notes and coins) issued by the Central Bank are called
.
9. The is the minimum fraction of deposits that banks
are required to keep as reserves.
10. is conducted when the government controls the
money supply.

III. Multiple Choice Questions

1. Which of the following assets is the MOST liquid?

A) a $50 bill B) a $50 Amazon.com gift certificate

C) 100 shares of Microsoft stock D) an economics textbook
2. Changing the level of government spending is an example of:

A) fiscal policy. B) interest rate policy.

C) monetary policy. D) exchange rate policy.

3. Alice's disposable income increases by $1,000, and she spends $600 of it.
Alice's: A) MPS is 0.4 and she saves $400. B) MPC is 0.4 and she saves $400.
C) MPS is 0.4 and she saves $600. D) MPC is 0.6 and she consumes $400.

4. What are the tools of macroeconomics?

A) Monetary Policy B) Fiscal Policy

C) Income Policy D) All of the above.

5. In macroeconomics, we study about ------------------

A) Theory of National Income & Employment B) Theory of Money Supply &

Price Level

C) Theory of International Trade & Eco growth D) All of the above.

6. The study of groups and broad aggregates of the economy is known as-----------

A) Microeconomics B) Macroeconomics

C) International Economics D) None of the above.

7. When national output rises, the economy is said to be in

A) an expansion B) a deflation

C) an inflation D) a recession

V. Essay Questions

9
What is the fiscal and monetary policy for Vietnam after
Covid19?

1
1