b. There is only one bank, and the band decides to make a loan for the full amount of its excess reserves.

a.Compute nominal GDP, real GDP, and the GDP deflator for each year, using 2013 as the base year.

b. Compute the percentage change in nominal GDP, real GDP, and the GDP deflator in 2014 and 2015 from the preceding year.

c.Did economic well-being rise more in 2014 or2015? Explain.

a. There is only one bank, and the bank decides not to make a loan with its excess reserves.

c.There are many banks, all of which make loans for the full amount of their excess reserves.

3. You are hired as the consultant to a monopolistically competitive firm. The firm reports the following information about its price, marginal cost, and average total cost. Can the firm possibly be maximizing profit? If not, what should it do to increase profit? If the firm is profit maximizing, is the firm in a long-run equilibrium? If not, what happen to restore long-run equilibrium? (12%) a.P<MC，P>ATC b.P>MC，P<ATC c.P= MC，P>ATC d.P>MC，P=ATC

(A) Draw Maria’s production possibilities frontier for reading economics and sociology.

(B) What is Maria’s opportunity cost of reading 100pages of sociology?

5. Ketchup is a complement for hot dogs. If the price of hot dogs rises, what happens to the market for ketchup? For tomatoes? For tomato juice? For orange juice? Please draw the diagram and show the change in equilibrium price and quantity for each market.(12%)

B. Given the following account information for Leong Corporation, all accounts have normal balances. Calculate the current ratio and the amounts of total equity for the company as of December 31, 2015. (5%)