ECO403 VU Midterm Papers Spring May 2012

Mcqs were some new and some from past papers or online quizzes

Short questions 2 of 3 marks

Suppose that the expected inflation rate is 7% in the United States and 9 % in Japan. The real interest rate is 11% in both countries; assume
that purchasing power parity holds. What is the nominal interest rate in each country?
One question was from lecture no.22 page no. 144 same question jo book may ha find MPK and find value of &k

Long questions 2 of 5 marks

Define shoe leather cost what is exact reason behind it and why it is called shoe leather cost.
One question was from lecture 20 steady state. Exact example which is mentioned at page no. 100. (Solve for the steady state)