ECON 201 ( 2 assignments )

Assignment-3

Deadline: 01/08/2021 @ 23:59

For Instructor’s Use only

Instructions – PLEASE READ THEM CAREFULLY

· Assignments will vary across CRNs, so make sure you do the assignment associated with your CRN.

· Any matched results will be considered cheating, so it results into ZERO grade.

· Show all works for calculation, final result will not be accepted without showing how you reach to it.

· NO LATE ASSIGNMENT WILL BE ACCEPTED UNDER ANY CIRCUMSTANCES.

· YOU CAN NOT USE ANY OUTSIDE RESOURCES FOR HELP ON THE ASSIGNMENT & IF YOU HAVE ANY QUESTION, ASK ONLY YOUR INSTRUCTOR ( [email protected] ). Or, attend help session. OTHERWISE, IT WILL BE CONSIDERED CHEATING.

· The Assignment must be submitted on Blackboard (WORD format only) via allocated folder.

· Assignments submitted through email will not be accepted.

· Students are advised to make their work clear and well presented, marks may be reduced for poor presentation. This includes filling your information on the cover page.

· Students must mention question number clearly in their answer.

· Avoid plagiarism, the work should be in your own words, copying from students or other resources without proper referencing will result in ZERO marks. No exceptions.

· All answered must be typed using Times New Roman (size 12, double-spaced) font. No pictures containing text will be accepted and will be considered plagiarism).

· Submissions without this cover page will NOT be accepted.

Question 1 (1 point) What is the different between recession and depression? This answer is only one sentence.

Question 2 (2 points) What are the three factors that shift the Aggregate Demand curve & explain how do they shift (the three effects)? Just list the three factors and briefly explain. The three factors are from the GDP components.

Question 3 (2 points) According to table 11 on the data you got on discussion about GDP; government expenditure in Saudi Arabia increased from 537,154,659,558 SAR on 2019 to 559,740,919,125 SAR on 2020, Assume Marginal Propensity to Consume is 0.80 (some studies show that MPC in Saudi Arabia is between 0.7 to 0.95). Calculate:

a- Multiplier effect.

b- Increase in GDP due to increase on government expenditure from 2019 to 2020.

c- How does your answer on part b will be if there is crowding out effect? (you only need to say: increase, decrease, or it does not change)