ECON 201 TA Section AF
Final Review
TA: Alfredo Effendy
Department of Economics
University of Washington
12/06/2022
1
Final Exam Review/Practice
budget deficit
gov
loanable
→
gov
need
Demand
funds
to
borrow
interest
rate
rate
s
"
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E
r
'
-
'
-
'
-
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-
r -
-
-
r
-
r
-
r
E-
.
-
r -
q
r
-
r
?
:
Qi
Qz
market
Crowding
goes
for
out
up
effect
"
:
crowding
reducing
slowdown
:p
i.
i.
from
goes up
interest
V2
money
out
private
investment
overall investment
economic
growth
'
D
;D
Q of loanable
fund
2
Final Exam Review/Practice
Short
p
-
run
EQ
Japan
SRAS
→
→
Pi
Pz
-
-
-
-
-
-
-
-
-
-
-
-
-
-
,
i
1
i
,
-
,
F-
→
I
-
F-!
-
,
→
I
←
1
raise
taxes
contractionany
reduce
price
fiscal policy
AD ( shift
left )
level & output ↓
lower
inflation
rate
&
economic
growth
not increase
AD
I
i
,
% Y
AD,
Y
3
Final Exam Review/Practice
-
==
Y
Ct G-
=
+
I
-
closed
econ
I
T
Y
680+0.75
*
=
Y*
205+0.754*-0.75125
=
0.254
✗
(4*-25+0)
#
*
,
=g④g
gyqgy
-
intercept
-
G-
+100+25
)
45°
eine
¥5
AE
" "5-
-
-
-
-
-
-
-
-
T
786.2
slope
0.75
Mpc
,
4
'
!
3145
Y
Final Exam Review/Practice
5
Final Exam Review/Practice
b)
Y
C.
=
c)
It G-
805
=
0.257
+
*
=
+
0.75
Y
797.5
Multiplier Transfer
Multiplier
for
680+0.7517
=
*
Y
-
25+15
) +100+25 +
-7.5
*
=
spending
c)
,[Pµ÷
,¥=,¥
=3
=
=
for
3190
0.75
=
15
=
4
6
Final Exam Review/Practice
d)
Transfer policy
meanwhile
ability
to
road
can
act
as
an
construction
stabilize
the
automatic
doesn't
stabilizer
,
have the
economy during
shock
7
Final Exam Review/Practice
multi
Tax
A- I
=
Spending
;?h÷
=
multi
multi
A-Tax
✗
=
Y
=
=
Multi
multi
=
C- 4)
A- G-
✗
G-
=
c-
5
×
multi
0.8
a
100
×
C- 1007
×
¥ ,÷g
+
-
=
,
=
A-Tax
=
=
+
$400
4
✗
5
=
=
,
AY
=
=
MPC
$500
+
5-1 400
=
=
2000
+
-
-
$400
400
1600
8
Final Exam Review/Practice
-
-
=
E
%
-
-
-
-
-
-
-
Ms
-
-
-
-
•
•
-
-
-
- -
"
E' MS
E-
E
"
,
mpg
→
MD
M
9
Final Exam Review/Practice
b)
Increase
in
GDP
increase
→
→
ppl
to
c)
Open
market
purchase
want
cover
of
economic
to
have
activity
more
expense / spending
asset
→
money
→
in
hard
MD ↑ (right shift)
shifts right
interest rate falls
MS
to
back
10%
10
Final Exam Review/Practice
recessionary
-
⑧
↓
N
⑦
·
·
·massives
gap
->
ADR
EQ
intervations,
drive down
will
can
&
&
withoutany
gap
at
the
recessionary
nominal wage
hire more workers
& As
shift rightward
level PC,
price
=>
↓
SRASe
->
->
gap
firm
boostoutput
SRASC->SRASI
real output
Y2
↑
·
11
Final Exam Review/Practice
F-
⑤
currently
take
recessionary gap gov
action
,
can
by conducting expansionary
•
•
a
@
fiscal policy
price
level
real output
→
AD
shift rightward
F-a ↑
Ya ↑
12
Final Exam Review/Practice
-
AMS
=
=
-
MB
°P%µI¥1:¥ˢ =g%→
=
Open
market
operation
=
=
-114000
700
13
Final Exam Review/Practice
#
-
reserved -10%
✗ 1500
Tons
=
=
$300
1500-300--1200
Liabilities
Asset
$300
required
$1500 demand deposit
RR
$1200 loans
required
new
(
1590×1500
RR
New
→
into
the
is
RR
$75
loans
,
=
reserve
=
225
same
15%
excess
by
First
the
✗
but
only
1500
reserve
=
15h
demand
225
that
multiplier effect
can
WA
Bank
T
-
ace
deposit
be
2¥
converted
=
500
14
Final Exam Review/Practice
1
only bank
loans the bank gives to people the use to
only
to
FWD After money multiplier
other ppl
deposit
got
It 's
so
pay
effect
assumed that
FWB
is
the
,
.
Ms
+
$500
,
New
DD
RR
loons
A
$1500
DD
+500
15%+2000
=
=
2000
L
RR 300
loans
-
2000
-
300
=
=
=
$2000
$300
1700
useful
create Ms
during recessionary
gap
1700
15
Final Exam Review/Practice
50000×2090--910000
Ascots
a)
$ 10000 RR
$ 40000
excess
µ
RR
Liabilities
50000
dd
reserve
b)
Both
unchanged
be
no
yet
loans
are
made
16
Final Exam Review/Practice
all the
Assets
10000
-
40000
RR
excess
Liabilities
50000
dd
reserve
are
converted
d)
→
increase
of
bars
Ms
+
into
by
loans
the
amount
$40000
excess
reserved
-140000 loans
d.)
unchanged
17
Final Exam Review/Practice
Money
effect
multiplier
Required
reserved
is
5029¥
=
250000
2070×250000=50000
-50000--200000
loans -150000
A- MS
liability
Asset
$50000
Rh
200000
loans
$250000
DD
=
=
total loons
200000
18
Final Exam Review/Practice
Liability
Assets
-
+
1000
1000
can be
new
more
Treasury
excess
used
loans
to
money
to
bills
reserved
make
create
supply
19
Final Exam Review/Practice
With
the
prevent
the
able
cover
to
Federal
Bank
get
any
role
Reserve
be
Runs
emergency
immediate
as
during
funding
exp
lender
crisis
from
reduce
of
last
of
resort ,
it
banks
are
the
,
the
federal
the
bank
reserve
to
likelihood
panics
20
Final Exam Review/Practice
①
Fiscal
policy useful
nearing
the
Fed
②
Reserve
Monetary
policy
caused
the
0
matter
policy
is
argument
process
or
then
lover
ability
is
bound limit
to
more
sensitive
to
policy
monetary
help
be
it
,
the
we
are
limits the
economy
when the
useful fiscal
any
when
political
between
different parties
passing
fiscal policy
,
use
thus
which
,
fiscal
can
slow down
21
Questions
22