6. (5%) Regard to the Ricardian Equivaience Theorem, which of the following statement is incorrect?
(A) It implies that a tax cut is not a free lunch.
(B) It holds by assuming a perfect credit market.
(C) It implies that government saving declines but private saving goes up when there is a tax cut in the current period.
(D) it still holds even if people could pass away in the future period.

2. (5%) In the Solow growth model, others being equal, an economy with a higher population growth rate: (A) has the same living standard as other countries. (B) tends to be the high-income-producing countries in the world. (C) faces capital dilution, thereby having a lower level of income per worker. (D) has a higher steady-state saving rate.

3. (5%) Which of the following staternents is correct? (A) In a closed economy, introducing a pay-as-you-go social security system increases the incentive of saving, thereby raising the capital stock. (B) In equilibrium, an increase in the marginal tax rate on labor income increases the demand for capital. (C) An increase in the marginal tax rate on asset income reduces investment in the short run and therefore reduces real GDP in the long run. (D) The average income tax is the change in income taxes when income changes one dollar.

4. (5%) Which of the following statem ments is incorrect? (A) The real return on money at hand (cash) is the negative inflation rate. (B) in a closed economy, it is the interest rate adjustment that brings the money market into an equilibrium. (C) If the real interest rate increases, the demand on money declines. (D) The natural rate of interest is the real interest rate at which the demand for goods and services equals the natural rate of output.

複選題5. (5%) In an open-economy framework: (A) if the home inflation rate is 5% and the foreign inflation rate is 2%, then the relative purchasing power parity 'implies that the home country would expect its currency to appreciate by 3%. (B) if a country adopts the fixed exchange rate regime, it gives up the control of its money supply. (C) The law of one price prohibits price discrimination. (D) The terms of trade are the amount of home goods that can be exported for each unit of foreign goods imported.

7. (5%) Regard to a competitive equilibrium in an economy, which of the following statement is incorrect? (A) Prices are exogenous. (B) The representative consumer makes his optimal decisions. (C) The perfectly competitive firm maximizes its profit. (D) All markets clear.

8.(5%) Consider a represen ntative agent who can live for two periods. In each period, he/she has one unit of time and allocates his/her time on working (hi) and leisure (V). The agent's life-time utility is given by:  where i denotes the period of time； β is the subjective discount factor； and ci represents consumption in period i. Furthermore, we denote the interest rate as r； the wage rate of working in period i as w； and the saving in period 1 as s. Which of the following statement is correct? (A)The life-time budget constraint is given by: (B) The optimal consumption in period 1 is: (C) The optimal decision on leisure in period 2 is: (D) All of the above.

9. (5%) Following Question 8, now suppose that the government introduces a policy: imposing a lump-sum tax (T.) on agents who are in their first period of life but giving a lump-sum transfer (Ta) to agents who are in their second period of life. Which of the following statement is correct? (A) If T1=T2, there is no effect on the representative agent's optimal decisions. (B) if T1＞T2(1+r),cs increases. (C) If the interest rate is zero, the life-time budget constraint is unchanged. (D) If T1＜T2/(1+r), the representative agent benefits from the policy.

10. (5%) To maximize profit, a firm should rent capital until (A) the marginal product of capital is zero. (B) the marginal product of capital begins to fall. (C) the marginal product of capital equals the rate of return of capital. (D) the capital-labor ratio is optimal.

複選題11. (5%) Use the midpoint method to calculate the percentage change in unit price and total expropriation quantity for facial masks before and after January 1, 2021, and then use your answers to calculate the elasticity of demand, assuming the total amount expropriated by the Taiwanese government is the actual quantity demanded for each price, holding other things equal. Which of these statements are true? (A)The percentage change in unit price has a magnitude smaller than 20%. (B)The percentage change in total expropriation quantity for facial masks is greater or equal to 40%. (C) The elasticity of demand for facial masks has a magnitude smaller than 2. (D) The demand for facial masks is inelastic. (E) None of the above.

複選題12. (5%) Use the midpoint method to calculate the percentage change in weekly quantity of facial masks rationing between week 6 and week 1, and then use your answers to calculate the elasticity of demand assuming the quantity of facial masks rationed in week 6 and week 1 are the actual quantity demanded for each corresponding price, holding other things equal. Which of these statements are true? (A)The percentage change in quantity demanded for facial masks is greater than 70%. (B) The percentage change in quantity demanded is likely smaller if week 7 data were used. (C) The elasticity of demand has a magnitude smaller than 3. (D) The demand for facial masks is elastic. (E) None of the above.