PRINCIPLES OF MACROECONOMICS

FINAL EXAM: Sample #1

Duration - 3 hours
Aids Allowed: Non-programmable calculators only
INSTRUCTIONS:
This examination consists of TWO PARTS
Part I

10 diagrammatic/calculation questions of which you are expected to answer

any eight (10 marks each for a total of 80%)

Part II

12 multiple choice questions of which you are expected to answer any ten.
(2 marks each for a total of 20%).
You must cross out the two multiple choice questions that you do not answer.
Wrong answers will not be deducted from right in grading Part II.

All questions are to be answered in the spaces provided in this question paper booklet
Do not remove any pages or add any pages. No additional paper will be supplied.
The blank backs of pages may be used for rough work. Show your work where applicable.

Print your name and student number clearly on the front of the exam and on any loose
pages.
Student Name: ______________________________________________________
(Family Name)
(Given Name)
Student Number: ______________________________

There are 14 pages to the exam.

Principles of Macroeconomics: Final Exam; Sample #1

PART I: Diagrammatic/Calculation
Answer only 8 of the 10 questions in Part I
Place your answers (and work where necessary) in the space provided.
1.

Comparative Advantage

Suppose that one unit of homogeneous resource produces either 20 kiwis or 5 pounds of
wool in New Zealand and that a similar resource unit produces either 10 kiwis or 4 pounds of
wool in Australia. Assume that these are the only countries and commodities in the world and
that there are no economies of scale and no transportation costs.
a) In the space below, determine the country with the comparative advantage in kiwi
production and the country with the comparative advantage in wool production. Show your
calculations.
Calculate opportunity cost: New Zealand 1K for 1/4W or 1W for 4K
Australia
1K for 0.4W or 1W for 2.5K
Comparative Advantage from lowest opportunity cost
New Zealand for K and Australia for W
b) Suppose that New Zealand has 150 units of the resource and Australia has 250 units of the
resource. Draw the country's production possibility curve in separate diagrams with kiwis
on the vertical axis. (1 mark)
PPC intercepts for at least one country and linear PPC
rotation of CPC and new intercepts
c) Suppose that the countries agree to trade at a rate of 3 kiwis for 1 pound of wool. Draw each
countries consumption possibility curve (labelled CPC) with trade in your diagrams. (1
mark)
d) Suppose that New Zealand decides to consume 1200 kiwis. Given trade with Australia at
the exchange rate of 3 kiwis for 1 pound of wool, what is Australia's consumption of kiwis
and wool? (1 mark)
New Zealand consumption of 1200K => trade of 3000-1200 = 1800 kiwis
=> Australia trades 600 wool for 1800 kiwis -> consumption: 1800K and 400W
=> Australia trades 600 wool for 1800 kiwis -> consumption: 1800K and 400W
2.

National Accounts (10 marks)

The following information defines Canada's domestic accounts in 1995 ($ Billions).

Net Income of Unincorporated Businesses (Farm and non-Farm) and Rent
49
Wages and Salaries and Supplementary Labour Income
420

Principles of Macroeconomics: Final Exam; Sample #1

Depreciation (Capital Consumption Allowances)
Exports
Corporate Profits (before Taxes)
Consumption
Interest and Miscellaneous Investment Income
Investment (Fixed)
Change in Inventories
Net Investment Income of Non-Residents
Retained Earnings (Undistributed Corporate Profits)
Government Spending
Government Transfer Payments
Imports
Corporate Taxes
Personal Taxes
Indirect Taxes Less Subsidies
Calculate (Show your work)
a) Gross Domestic Product as Aggregate Expenditure (2 mark)
1 mark: setup with one incorrect number
1 mark: AE = 463 + 117 + 8 + 193 + 302 - 276 = 807

106
302
75
463
50
117
8
24
25
193
78
276
36
94
107

b) Net Domestic Income calculated from Aggregate Expenditure (1 mark)

1 mark: NDY = 807 107 106 = 594
c) Net Domestic Income calculated from Factor Incomes (2 marks)
1 mark: everything correct except for one number
1 mark: correct answer = 420 + 75 + 49 + 50 = 594
d) Personal Income calculated from Net Domestic Income (2 marks)
1 mark: everything correct except for one number
1 mark: correct answer = 594 36 25 + 78 = 611
e) Savings (1 mark)
1 mark: = 611 94 - 463 = 54
f) Net Domestic Product (1 mark)
1 mark= 701 from 807 - 106 or 594 + 107
f) Gross National Product (1 mark)
1 mark: = 807 - 24 = 783
3. Prices Indices (10 marks)
1996
Electricity (KWs)
Natural Gas (CF)

Price/unit
0.06
0.15

2006
Quantity
1500
2000

Price/unit
0.08
0.3

Quantity
2400
1200

Principles of Macroeconomics: Final Exam; Sample #1

The above table gives data for the price/unit ($)and quantity of Electricity and Natural Gas
consumed per month on average by the average family in 1996 and 2006. Assuming that
1996 is the base year, calculate the following values.
a) nominal family consumption in 2006 (1 mark)
1 mark: = 552 from something like 0.08*2400 + 0.3*1200
b) the consumer price index for 2006 to one decimal (3 marks)
1 mark: setup for correct denominator = 0.06*1500 + 0.15*2000
1 mark: setup for correct numerator = 0.08*1500 + 0.3*2000
1 mark: correct answer = 184.6 from 100*0.06*2000 + 0.3*1500/0.06*1500 + 0.15*2000
(accept 184 or 185)
c) real consumption in 2006 relative to 1996 according to the consumer price index
(1 mark)
1 mark: 299 from something like 552/184.6 (accept something close with a decimal)
d) the total inflation (%) between 1996 and 2006 relative to 1996 using CPI (1 mark)
1 mark: 84.6% (accept 84 or 85%)
e)real consumption in 2006 according to the GDP deflator measure (1 mark)
1 mark: 324 from something like 0.06*2400 + 0.15*1200
f) the GDP deflator for 2006 given 1996 as the base year (3 marks)
1 mark: setup for correct denominator = 0.06*2400 + 0.15*1200
1 mark: setup for correct numerator = 0.08*2400 + 0.3*1200
1 mark: correct answer = 170.4 (accept between 170 and 171) from some work
4. MacroModel (10 marks)
An economy has the following set of macroeconomic equations.
Consumption:
C = 580 + 0.8Yd Exports:
X = 720
Investment:
I = 70 + 0.1Y
Imports:
IM = 150 + 0.1Y
Government Spending G = 460
Net Taxes (Taxes Transfers) T = -30 + 0.15Y
(note that net fixed taxes are 10 not simply 10)

Principles of Macroeconomics: Final Exam; Sample #1

a) Calculate the Aggregate Expenditure equation. (2 marks)

1 mark: calculate correct constant term = 1,822
1 mark: calculate correct induced term = 0.75Y
from (say) AE = 580 + 0.8(Y (-30 + 0.15Y) + 70 + 0.1Y + 460 + 720 (150 + 0.1Y)
= 1,704 + 0.68Y
b) Calculate the value of Equilibrium Income (1 mark)
1 mark: = 5,325 from 1,704/(1-0.32)
c) What is the budget surplus(+)/deficit(-) at equilibrium? (1 mark)
1 mark: = +308.75 from 30 + 0.15*5325 460
d) What is the change in Inventories at GDP (Y) equal to 5,500? (2 marks)
1 mark: AE = 5,444 from something like 1,704 + 0.68*5500
1 mark: Change in Inv = 5,500 5,444 = +56 (must not be negative)
Suppose that there is a recessionary gap of 200.
i) What change in government spending will eliminate the recessionary gap? (1 mark)
1 mark: = +64 from 200*0.32 or 200/3.125 or something
ii) What change in fixed taxes will eliminate the recessionary gap of 200? (2 marks)
1 mark: recognition of fixed tax multiplier as 0.8/(1 0.68) = 2.5 or any use of 0.8*200 and the
multiplier (Dont worry about the negative sign here)
1 mark: = -80 (must be negative) from some work such as -200/2.5
iii) What change in fixed transfer payments will eliminate the recessionary gap? (1 mark)
1 mark: = +80 (must be positive) with some work such as 200/2.5
5.

Money Supply (10 marks)

Assume that the following conditions hold in Canada's banking system: deposits are all
demand deposits, the required reserve ratio for deposits is 12.5% [0.125], there are neither
excess reserves nor excess circulation, and banks hold all interest bearing assets as loans.
Suppose that the Bank of Canada has an outstanding currency issue of $64 billion; the
chartered banks have $2 billion worth of deposits at the bank of Canada; and the currency in
circulation (i.e., in the hands of the public) is $37 billion.
a) What is the money supply at equilibrium? (1 mark)

Principles of Macroeconomics: Final Exam; Sample #1

1 mark: = 269 from something like 37 + (64 37 + 2)/0.125
b) What is the amount of loans at banks at equilibrium? (1 mark)
1 mark: = 203 from something like 232 29 or (64 37 + 2)/0.125 - 29
Now calculate the change in reserves and in the money supply at the new equilibrium for
each of the following circumstances given the above information.
c) The Bank of Canada sells $US to buy $45 million Canadian in the foreign exchange market
and simultaneously sells $13 million in Federal Government bonds to the public.
i) the change in reserves is? (1 mark)
1 mark: -58 (m) (must be negative)
ii) the change in money supply is? (1 mark)
1 mark: = -58m/0.125 = -$464m (need not be negative if mark lost for wrong sign in i)
d) The Federal government finances health expenditure of $450 million by selling bonds worth
$160 million to the Bank of Montreal and increasing taxes by $200 million.
i) the change in reserves is? (1 mark)
1 mark: 0 m
ii) the change in money supply is? (1 mark)
1 mark: = 0
e) Currency in circulation decreases permanently by $120 million due to ATMs.
i) the change in reserves is? (1 mark)
1 mark: = +120m (must be positive)
ii) the change in money supply is? (1 mark)
1 mark: = +840 from -120 + 120/0.125 (need not be positive if mark lost for wrong sign in i)
d) The Bank of Canada writes a check to the Toronto-Dominion bank for $90 million to buy
bonds and switches $35 million in Federal Government deposits at ScotiaBank to the Bank
of Canada
i) the change in reserves is? (1 mark)
1 mark: +$55 m (from 90 35)
ii) the change in money supply is? (1 mark)
1 mark: = +440 m from something like 55/0.125
6.

Monetary Policy: Linear Equations (10 marks)

The following equations describe an economy
Money Demand: Md = 0.125Y 800r
Investment: I = 68 400r
Aggregate Expenditure: AE = 360 + I + 0.75Y
Amounts are in $billions (e.g., 360 = $360 billion)
a) Given Money Supply (Ms) = 154 (billion) and Y/GDP = 1,616 (billion), what is equilibrium
r and I? (2 marks)

1 mark: r = 0.06 (6%)

from something like r = (0.125(1616) 154)/800
1 mark: I = 44
from I = 68 400(0.06)
b) Is Y in equilibrium at 1616? Show your work. (1 mark)
-

Principles of Macroeconomics: Final Exam; Sample #1

1 mark: Yes since Y = (360 + 44)/(1-0.75) = 1500 (or something similar)

c) Draw the Money Demand/Supply, MEI, and AE/Y diagrams, carefully labeling equilibrium
r, I, and Y and the Money intercepts for Money Supply and Demand, the Aggregate
Expenditure intercept, and the Investment intercept for Marginal Efficiency of Investment.
(3 marks)
1 mark: purely diagrammatic intersection of money demand/supply at 0.06 (0.06), I = 44 from
downward sloping MEI, and AE intersecting 45 degree line at 1616
1 mark: two correct of Ms = 154, MEI intercept = 68
1 mark: Md intercept = 202, and AE intercept = 404

d) What is the immediate effect (i.e., not including interest rate effects) on equilibrium GDP of
an increase in autonomous government spending of + 20? (1 mark)
1 mark: Y = 1,696 from something like (360 + 20 + 44)/(1 0.75)
e) What is the effect on the interest rate and investment of an increase in government
spending by +20 if Money Supply remains at 154? Ignore crowding out. (2 marks)
1 mark: r = 0.0725 (7.25%) from 154 = 0.125(1696) 800r
1 mark: I = 39 from something like 68 400(0.0725)
f)

Is the Y you calculated in d) in equilibrium? Briefly explain.

1 mark: No because the interest rate effect changes Investment and thus Y (Anything that
conveys this understanding will do including mention of the crowding out affect)
7.

Money and Spending Equilibrium (10 marks)

Steven Harper intends to reduce the GST sales tax by 1%. If the Conservatives make no
other tax or expenditure changes, what effect will this reduction have on the economy if
Money Demand is elastic and the Marginal Efficiency of Investment is elastic. Illustrate
your understanding by using the appropriate diagrams to analyze the impact of reduction of
taxes on aggregate expenditure, GDP, the interest rate, and investment. Be sure to
demonstrate crowding out. Ignore price level and exchange rate effects.
Label your axes carefully. Use the subscript o for the initial equilibrium and the subscript
1 for the initial effects on the variables and the subscript 2 for the final effect on Y.

Principles of Macroeconomics: Final Exam; Sample #1

AE 1

real AE

r
SMo

Yo Y2 Y1
r

AE 2
AEo

real Y (or GDP)

r1
ro
DM1
D

MEI

Mo

I1

M (or M/P)

Io

real I

1 mark:
ro from vertical Money Supply and negatively sloped Money Demand diagram
1 mark:
Io at ro from negatively sloped MEI
1 mark:
Yo from positively sloped and something ressembling a 45 degree line
1 mark:
Both Dm and MEI are relatively flat
1 mark:
increase AE (to say AE1) due decrease in taxes
1 mark:
increase in Y (to Y1 say)
1 mark:
increase in Money Demand (to MD1 say) to give increase in r (to r1 say)
1 mark
decrease in Investment (to II say)
1 mark:
fall in AE relative to AE1 (to AE2 say) but still > Aeo
1 mark:
final Y (Y2 say) > Yo but < Y1 (Y2 not shown on above graph)
8. Aggregate Demand and Aggregate Supply Equations (10 marks)
An economy is presently in long-run equilibrium with the following Aggregate Expenditure
and Short Run Aggregate Supply equations.
AE = 7,600 + 0.6Y 8P
SRAS: Y = 12,000 + 30P
a) What is the Aggregate Demand function? (2 marks)

1 mark: recognition that Y = 7,600 + 0.6Y 8P (or Y = (7600 8P)/(1-0.6)

1 mark: Y = 19,000 20P
b) What is short-run equilibrium price and Y/GDP? (2 marks)

Principles of Macroeconomics: Final Exam; Sample #1

1 mark: P = 140 from 19,000 20P = 12,000 + 30P or something similar
1 mark: Y = 16,200
19,000 20(140) or 12,000 + 30(140)
c) What is short-run equilibrium price and Y/GDP given a decrease in government spending =
-400? (3 marks)

1 mark: AD: Y = 18,000 20P from Y = 7200 + 0.6Y 8P or something similar

1 mark: P = 120
from 18,000 20P = 12,000 + 30P
1 mark: Y = 15,600
from 18,000 20(120) or 12,000 + 30(120)
d) If long-run equilibrium GDP = 15,000, what is long-run equilibrium price given the decrease
in government spending = -400? (1 mark)
1 mark: P = 150 from 15,000 = 18,000 20P
e) Ignore part d). If long-run equilibrium price is 100, what is long-run equilibrium GDP given
the decrease in government spending = -400? (1 mark)
1 mark: Y = 16,000 from 18,000 20(100)
f) Given your answer from e), what is autonomous expenditure when long-run equilibrium price
is 100 given the decrease in government spending = -400? (1 mark)
1 mark: A = 6,400 from something like AE = 7200 0.6Y 8(100)
9. Aggregate Demand and Aggregate Supply (10 marks)
a) Assume that an economy is initially in short-run Price (Po) and GDP (Yo) equilibrium with
considerable unemployment due to a recessionary gap. Draw an Aggregate
Demand/Aggregate Supply diagram to show the short-run (Ps, Ys) and long-run (P1, Y1)
effects of an increase in government spending that would eliminate the recessionary gap if
there was no change in prices. (5 marks)
P level

LRAS

SRASo
SRAS 1

Ps
Po
ADs
ADo
Yo Ys Y*

real Y (or GDP)

Principles of Macroeconomics: Final Exam; Sample #1

1 mark: Po and Yo at intersection of AD and SRASo, and vertical LRAS
1 mark: increase AD to intersect LRAS (or Y*) > Yo
1 mark: AD must intersect LRAS (or Y*) at Po so that Ps > Po and Ys > Yo but Ys < Y* from
intersection of SRASo and AD
1 mark: increase SRAS to intersect AD at LRAS (Y*)
1 mark: P1 = Po (i.e., no change in price) and Y1 = Yo
b) Suppose that an economy is initially in short-run and long-run Price (Po) and GDP (Yo)
equilibrium. Draw an Aggregate Demand/Aggregate Supply diagram to show the short-run
(Ps, Ys) and long-run (P1, Y1) effects of a significant technological improvement. Be sure to
shift all necessary curves. (5 marks)
P

LRAS1 SRASo
LRASo
SRAS1
SRAS2

Po
Ps
P1

ADo
AD1
Y* Ys Y*1

1 mark: SRAS shifts to the right

1 mark: Ps < Po and Ys > Yo at SRAS1 intersect Ado
1 mark: LRAS shifts right (should be, but does not have to be here, beyond beyond Ys)
1 mark: P1 < Ps and Y1 > Ys at AD intersect LRAS1
1 maark: SRAS shifts down to intersect AD at LRAS1
10.
Exchange Rates (10 marks)
The following diagrams represent the original equilibrium position in the market for the
Canadian dollar. Show the shift in the demand and/or supply of Canadian dollars and the new
equilibrium exchange rate under the following circumstances each considered separately.
Assume that the exchange rate is flexible unless otherwise advised.
a) A decrease in Canadian imports from the U.S.
(1 marks)
EUS/C

1 mark: Supply decreases

S$C

Eo

D$C

$Co

b) Canadian inflation is 5% and U.S. inflation is 2%.

(2 marks)
1 mark: Demand decreases
1 mark: Supply increases (shifts right)

EUS/C

Q$C

S$C

Eo

D$C

$Co

Q$C

Principles of Macroeconomics: Final Exam; Sample #1

c)

Canadian real GDP increases by 3.5% and US real GDP

increases by 1%. (2 marks)

1 mark: Supply increases (shifts right)

1 mark: Demand increases but not as much as S so
E depreciates (must have depreciation)

EUS/C

S$C

Eo

D$C

$Co

d) Assume a fixed exchange rate for the EC/US. In the diagram,

show the immediate impact of an increase in the Canadian
money supply on Demand and Supply of the $Canadian. (2
marks)
1 mark: Demand decreases
1 mark: Supply increases (shifts right)

EUS/C

Q$C

S$C

Eo

D$C

$Co

Q$C

e)

What is the equililbrium effect of an increase in the Canadian money supply on EC/US and
the interest rate in Canada given the fixed exchange rate? Use your diagram in d) and a
draw a Money Demand/Supply diagram in the space below to demonstrate your position.
(3 marks)
1 mark: Indicate Qs > Qd at Eo (surplus of $C) in diagram above
1 mark: Money D/S diagram with an initial increase in MS and decrease in r
1 mark: Money Supply decreases in Money D/s diagram raising r back to original r
PART II: MULTIPLE CHOICE: DO ALL TEN QUESTIONS
Circle the best answer for each question.Each question is worth 2 marks.
1.

Which of the following is false for Canadian and US unemployment data for the month of
March?
a) the unemployment rate in Canada fell to a 32 year low
b) the unemployment rate fell in both Canada and the U.S.
c) employment increased in both Canada and the U.S.
d) employment growth was greatest in Ontario despite weak manufacturing
e) full-time jobs accounted for most of the increase in Canadian employment
f) none of the above

2.

Which of the following was the U.S. markets response to the March employment data?
a) bond prices fell on expectation of lower interest rates due to low inflation
b) bond prices fell on expectation of higher interest rates to reduce inflation
c) bond prices rose on expectation of lower interest rates due to low inflation
d) bond prices rose on expectation of higher interest rates to reduce inflation
e) none of the above

3.

Suppose that all the individuals in an economy have the same Marginal Propensity to
Consume (MPC). Suppose further that the government increases income taxes by $100

Principles of Macroeconomics: Final Exam; Sample #1

million to finance a $100 million increase in transfer payments. Which of the following is
the most likely effect on the National Accounts?
a) Consumption decreases by $100 million
b) Consumption decreases by the MPC*$100 million
c) Consumption doesnt change
d) Consumption increases by the MPC*$100 million
e) Consumption increases by $100 million
f) none of the above
4.

5.

What is the effect of an increase of the tax rate on Aggregate Expenditure equilibrium? In
particular, what is the effect on Autonomous Spending (A), the Marginal Propensity to
Spend (MPE), and equilibrium GDP (Y) ceteris paribus?
a) decrease in A, decrease in MPE, and decrease in Y
b) decrease in A, increase in MPE, and decrease in Y
c) decrease in A, increase in MPE, and increase in Y
d) no change in A, decrease in MPE, and decrease in Y
e) no change in A, increase in MPE, and increase in Y
f) increase in A, decrease in MPE, and decrease in Y
g) increase in A, decrease in MPE, and increase in Y
h) increase in A, increase in MPE, and increase in Y
i) none of the above
Suppose that Md = 0.1Y 1000r is the Money Demand function for an economy and the
economy is presently at equilibrium with Y = 2000, Ms (Money Supply) = 150, and the r
(interest rate) = 0.05 (5%). What is the change in Money Supply necessary to keep the
interest rate unchanged if GDP increases to 2400?
a) 50
b) 40
c) 30
d) 20
e) 10
f) 0
g) +10
h) +20
i) +30
j) +40
k) +50
l) none of the above

6.

Suppose that the Marginal Efficiency of Investment shifts out due to increased expansion
during business cycle expansion (such as is occuring now). What would be the equilibrium
effect of such a increase in the Marginal Efficiency of Investment?
a) decrease in Investment, decrease in GDP and decrease in the interest rate
b) decrease in Investment, decrease in GDP and increase in the interest rate
c) decrease in Investment, increase in GDP and decrease in the interest rate
d) decrease in Investment, decrease in GDP and increase in the interest rate
e) increase in Investment, decrease in GDP and decrease in the interest rate
f) increase in Investment, decrease in GDP and increase in the interest rate
g) increase in Investment, increase in GDP and decrease in the interest rate
h) increase in Investment, increase in GDP and increase in the interest rate
i) none of the above

7.

Which of the following best explains the recent reluctance of the Bank of Canada to raise
interest rates as rapidly as the Federal Reserve Board?
a) the Canadian economy grew more slowly than the US economy in the past five years
b) the Canadian economy is further from potential GDP than the U.S. economy

Principles of Macroeconomics: Final Exam; Sample #1

c) fear of inflation is higher in Canada than in the U.S.
d) $Canadian has appreciated significantly while the $US has depreciated significantly
e) none of the above
8.

9.

Suppose that an economy is initially in equilibrium at potential GDP. Which of the

following is the long-run equilibrium result of an increase in government spending on
Aggregate Expenditure (AE), Aggregate Demand (AD) and Short-run Aggregate Supply
(SRAS)?
a) AE shifts up (increases), AD shifts right (increases), and SRAS shifts up
b) AE shifts up, AD shifts right, and SRAS shifts down
c) AE shifts up, AD shifts down, and SRAS Shifts down
d) AE doesnt change, AD shifts right, and SRAS shifts up
e) AE doesnt change, AD doesnt change, and SRAS doesnt change
f) none of the above
Suppose that an economy is presently at potental (full employment) income. What is shortrun and long-run equilibrium effect (relative to initial equilibrium) on the Price level (P) and
real GDP (Y) of a significant increase in the price of oil?
a) decrease in P and Y in the short-run and decrease in Y in the long-run
b) decrease in P and Y in the short-run and no change in Y in the long-run
c) decrease in P and increase in Y in the short-run and decrease in Y in the long-run
d) decrease in P and increase in Y in the short-run and no change in Y in the long-run
e) increase in P and decrease in Y in the short-run and decrease in Y in the long-run
f) increase in P and decrease in Y in the short-run and no change in Y in the long-run
g) increase in P and increase in Y in the short-run and decrease in Y in the longh) increase in P and increase in Y in the short-run and no change in Y in the long-run
i) none of the above

10. What is the equilibrium effect of an increase in Money Supply on the interest rate, net
exports, GDP, and the exchange rate (E) if the exchange rate is flexible?
a) no change in interest rate, net exports, GDP, or exchange rate (E)
b) no change in interest rate, net exports, and GDP but depreciation of E
c) no change in interest rate but increase in net exports and GDP and depreciation of E
d) decrease in interest rate, net exports, GDP, and depreciation of exchange rate
e) decrease in interest rate and net exports, increase in GDP, and depreciation of E
f) decrease in interest rate and net exports, increase in GDP, and appreciation of E
g) decrease in interest rate, increase in net exports and GDP, and depreciation of E
h) decrease in interest rate, increase in net exports and GDP, and appreciation of E
i) none of the above