Question 1.

Suppose that the IS curve of an economy is:

Y-991-34 r.

The marginal propensity to consume is 0.6

Suppose that the government increases government purchase by 18 units which leads to a 2 percentage points increase in the interest rate. Calculate the resulting change in income.

Question 2.

The nominal GDP of an economy was 180 in year 1, and it was 279 for year 2. The real GDP in year 1. Calculate at prices of year 2 is 229. The real GDP in year 2 calculated at prices of year 1 is 166.

Use the chain weighted method to calculate the growth rate of real GDP in percentage points.

Question 3.

The Phillips curve of an economy is =^e-1.4(u-9).Currently, the inflation rate is 0 percent while people expected a 10 percent inflation rate for this year. Calculate the actual unemployment rate.