NSU MBA BUS 530 (2) Summer Semester 2021

Midterm exam
Due Date: 03/08/2021 Class time
Total marks: 25
Name: ID:

Instruction:

 This is an individual assessment. This will be uploaded in the google classroom and you have turn
it in there.
 Plagiarism is strictly prohibited.
 Copying from others is strictly prohibited. If two script found identical and copied, will be
penalized.
 You must handwrite the exam in A4 size page, and then scan it and make a pdf file.
 Turn-in the pdf file within the due time. Late submission not acceptable.

Part A: Short Questions (2*5=10)

i) How does unemployment is measured? What do you understand by 5% unemployment rate in
Bangladesh?

ii) What are the different types of unemployment? Explain with examples.

iii) Does Consumer Price Index (CPI) rate overestimates inflation rate? If so, what percentage and why?

iv) Briefly explain why Long Run Aggregate Supply (LRAS) curve is a vertical line, rather than a upward
sloping line?

v) Why does the inflationary gap NOT really a myth?

Part B: Answer the following questions (3*5=15)

Q1: Calculate CPI and Inflation rate of the following years for a Consumer Basket: 10 KG Beef, 30 KG
rice and Number of laptops.

Note that you must put the fifth digit of your ID number in the above box. For example, if your id is
1211865660, then put 8 in the above box and do the following math. 2015 is the base year.

Mention your ID here:

Laptop
Beef price Rice price price
Year (Taka) (Taka) (Taka) cost CPI inflation
2015 250 40 55000
2016 350 40 40000
2017 400 45 45000
2018 450 50 35000
2019 500 55 40000
2020 550 60 38000

Q2: What is the classical economists’ proposition about the economy’s states. How does the economy
in the classical economist view restore to its natural rate of GDP from a recessionary gap and an
inflationary gap? Provide answer with appropriate graph.
Q4:

If Bangladesh economy is already in a recessionary gap due to COVID-19 pandemic, please answer the
following questions:

a) What is the definition of the recessionary gap?

b) what is the condition of the unemployment situation in this stage?

c) To restore the economy to its natural rate of GDP, what are the propositions of Classical Economists
were refuted by John Maynard Keynes? How does an economy in a recessionary gap may overcome
the problem following the prescription given by Keynes? Explain in detail in your own word.