Macro Economics Exam Short Essays: Please select and answer seven ( 7) of the following essay type questions. A. Please explain with specific examples for each category: “Among risks the Fed is taking: that some programs won’t work, that officials won’t be able to unwind them, that politicians will grow accustomed to directing the central bank to fix problems its tools aren’t designed to solve, and that public discontent about the central bank’s choices will erode its authority over time. “ WSJ 04 28 2020 B. What specific Macro-economic phenomenon is being described. Explain how this phenomenon impacts the balance sheet of the Federal reserve and of a commercial bank, “The Fed has a unique power, the ability to create money by crediting banks with funds they can lend. That helps it guide the cost of money, which is the interest rate” WSJ 04 28 2020. C. Please describe four major initiatives that the Federal Reserve has undertaken, in order to address the impact of COVID-19 to the economy. D. What does the “Bagehot’s Dictum,” refer to? Please explain in the context of the effect of the current effect of the COVID-19 to the economy. E. Suppose the economy is suffering in a recessionary period. Firms are facing increasing inventories and individual consumers are increasing their saving to prepare for hard times ahead. What is likely to happen to the economy and can it correct itself and grow toward full employment in the short run? How is this different and how is it similar to the impact of the COVID-19 in the economy? F. Describe the role of business inventory change in determining the equilibrium level of GDP and changes in the level of GDP. G. Differentiate between an induced increase in consumption and an autonomous increase in consumption. How are they represented on a graph? H. The expenditure schedule and the aggregate demand curve show much the same thing, with one crucial difference-the price level. How does the price level affect the two schedules? I. Define the terms recessionary gap and inflationary gap. Why do they occur? Please frame your answer within the context of the COVID-19 impact in the economy. J. Why do booms and recessions tend to be transmitted across national borders? Please frame your answer within the context of the COVID-19 impact in the economy. K. The total expenditure schedule in Macroland begins with these initial levels (in billions of dollars): Income = 1,000; Consumption = 900; Investment = 200; Government = 300; Net Exports = −100. If the MPC = 0.75 and income increases in increments of 200, find the equilibrium level of income. If full employment requires an income level of 2,000, what (if anything) should the government do? Indicate both the direction of the spending change and the size of the spending change. L. What is a multiplier? How does the multiplier effect occur? Please provide examples of at least three types of multipliers in an economy. Please provide some examples.

1. Macro Economics Exam
Short Essays:
Please select and answer seven ( 7) of the following essay type
questions.
A. Please explain with specific examples for each category:
“Among risks the Fed is taking: that some programs won’t
work, that officials won’t be able to unwind them, that
politicians will grow accustomed to directing the central bank to
fix problems its tools aren’t designed to solve, and that public
discontent about the central bank’s choices will erode its
authority over time. “ WSJ 04 28 2020
B. What specific Macro-economic phenomenon is being
described. Explain how this phenomenon impacts the balance
sheet of the Federal reserve and of a commercial bank, “The
Fed has a unique power, the ability to create money by crediting
banks with funds they can lend. That helps it guide the cost of
money, which is the interest rate”
WSJ 04 28 2020.
C. Please describe four major initiatives that the Federal
Reserve has undertaken, in order to address the impact of
COVID-19 to the economy.
D. What does the “Bagehot’s Dictum,” refer to? Please explain
in the context of the effect of the current effect of the COVID-
19 to the economy.

2. E. Suppose the economy is suffering in a recessionary period.
Firms are facing increasing inventories and individual
consumers are increasing their saving to prepare for hard times
ahead. What is likely to happen to the economy and can it
correct itself and grow toward full employment in the short run?
How is this different and how is it similar to the impact of the
COVID-19 in the economy?
F. Describe the role of business inventory change in
determining the equilibrium level of GDP and changes in the
level of GDP.
G. Differentiate between an induced increase in consumption
and an autonomous increase in consumption. How are they
represented on a graph?
H. The expenditure schedule and the aggregate demand curve
show much the same thing, with one crucial difference-the price
level. How does the price level affect the two schedules?
I. Define the terms recessionary gap and inflationary gap. Why
do they occur? Please frame your answer within the context of
the COVID-19 impact in the economy.
J. Why do booms and recessions tend to be transmitted across
national borders? Please frame your answer within the context
of the COVID-19 impact in the economy.
K. The total expenditure schedule in Macroland begins with

3. these initial levels (in billions of dollars): Income = 1,000;
Consumption = 900; Investment = 200; Government = 300; Net
Exports = −100. If the MPC = 0.75 and income increases in
increments of 200, find the equilibrium level of income. If full
employment requires an income level of 2,000, what (if
anything) should the government do? Indicate both the direction
of the spending change and the size of the spending change.
L. What is a multiplier? How does the multiplier effect occur?
Please provide examples of at least three types of multipliers in
an economy. Please provide some examples within the context
of the COVID-19 impact in the economy.
M. Distinguish between a movement along the aggregate supply
curve and a shift of the entire aggregate supply curve. What
factors cause each to occur? Please include in your answer the
COVID-19 impact in the economy.
N. What causes the aggregate supply curve to have an upward
slope in the short run, but a vertical slope in the long run?
O. Using the concepts of aggregate demand and aggregate
supply, explain how the economy reaches an equilibrium level
of real GDP and price level.
P. Why is it possible that the economy will not self-correct out
of a recessionary gap? Please explain your answer within the
context of the COVID-19 impact in the economy.

4. Q. What is meant by an economy's self correcting mechanism?
Explain the process through which self correcting mechanism
reduces inflationary gap.
R. When price level is considered, the value of the multiplier
will be less than that suggested by the oversimplified version of
multiplier. Why?
S. Why is a period of stagflation part of the normal aftermath of
a period of excessive aggregate demand?
T. Discuss some of the arguments that help explain why wages
and prices rarely fall in a modern economy.
U. Define the following terms and explain their significance to
the study of macroeconomics:
a.
fiscal policy
b.
transfer payments
c.
effect of income taxes on the multiplier
d.
supply-side tax cuts
e. automatic stabilizer
V. Explain why a change in income tax rates causes the
consumption schedule to change slope.

5. W. Why does the numerical value of the multiplier fall when an
income tax is added to the income-expenditure model?
X. Why is the personal income tax considered to be one of the
main features of our modern economy that helps ensure against
a repeat performance of the Great Depression?
Y. How do transfer payments function as negative taxes?
Z. Explain how a "conservative" and a "liberal" might differ in
the types of policies they advocate to counteract a recessionary
gap.
AA. Explain some of the steps that a government would wish to
adopt in an inflationary environment.
BB. What is the difference between tax cuts imposed on higher-
income households compared with lower- and middle-income
households? Discuss the implications for the multiplier and the
effectiveness of the tax cuts for boosting GDP.
CC. What are the policies usually advocated by supply side
economists? How do they justify these proposals?
DD. Discuss some of the general conclusions arrived at about
supply-side tax initiatives.
EE. What would be the likely result of a recessionary gap? If

6. this leads to a fall in the nominal wage what impact it would
have on the aggregate supply curve and on recessionary gap?
FF. Describe the main explanations for the downward rigidity of
wages in the modern macro-economy. Evaluate their probability
of being correct and important.
GG. Using the aggregate demand/aggregate supply model,
explain the difference in the employment prospects of the
graduates of 2007 and 2009.
HH. Define the following terms and explain their importance to
the study of macroeconomics:
a.
money
b.
M1
c.
near money
d.
bank run
II. What is a barter system? What are the drawbacks of this
system?
JJ. Why are the following included in the broader definition of
supply known as M2?
(a)
money market deposit accounts
(b)
money market mutual funds

7. (c)
savings accounts
KK. What is fiat money? Why is fiat money important in the
United States today?
LL. In what sense can it be said that money is a social
invention? How does a barter system of trade compare to the
invention of money?
MM. The banking system of the United States is a fractional
reserve system. What dangers does this pose for the safety of
the banking system?
NN. Bankers have a reputation for conservatism in politics,
dress, and business affairs. Is there an economic rationale for
this conservatism? Explain.
OO. Why are credit cards not considered part of the money
supply?
PP. What may limit the size of the money supply expansion to
an amount less than indicated by the oversimplified deposit
creation formula?
QQ. Explain the "too big to fail" doctrine.

8. RR. What is the criticism leveled against deposit insurance by
the FDIC?
SS. Discuss some of the government regulations designed to
ensure depositors' safety and to control the money supply.
TT. Explain why monetary policy is needed specifically with
regard to the existence of excess reserves. Compare and contrast
the effectiveness of monetary policy during the Great
Depression and the Great Recession?
UU. Define the following terms and explain their importance to
the study of macroeconomics.
a.
central bank
b.
Federal Open Market Committee
c.
supply of money
d.
monetary policy
VV. Why is the Chair of the Fed Reserve considered by many to
be the most powerful person in the economic world?
WW. Explain how interest rates and bond prices are related to
one another. Why is this important for monetary policy?
XX. Why do economists insist on emphasizing the difference

9. between money and income? Why is this difference important in
macroeconomics?
YY. Describe the origins of the Fed and the arguments about the
independence of the Fed.
ZZ. How does a central bank influence the lending capacity of
the banks?
AAA. Explain the concept of 'lender of last resort'. What is
discount rate?
BBB. What is the federal funds rate? What are the main
determinants of the federal funds rate?
CCC. How does an open market purchase by the Fed affect the
level of bank reserves and the interest rate? Illustrate the
interest rate effect by drawing the appropriate graph.
DDD. Explain the linkages in the causal chain when the Fed
conducts a contractionary monetary policy. What will be the
ultimate effect on GDP?
EEE. In 2007, as stock prices in general were falling, many
investors began switching their funds into purchasing bonds.
Surveys suggest that many of these investors did not understand
the basic relationship between bond prices and interest rates.
Using a numerical example, illustrate how an increase in the
demand for bonds would affect the interest rate paid on bonds.

10. FFF. Explain the relationship between interest rates and (1)
investments in housing, and (2) business investments.
GGG. Why does the economy's aggregate demand curve have a
negative slope?
Please answer all of the multiple choice questions:
Multiple choice questions:
1. The difference between disposable income and consumption
spending is
a.
transfer payments.
b.
personal taxes.
c.
net exports.
d.
personal investment.

11. e.
personal saving.
2. Historical data depicted on a scatter diagram show that
consumer spending and disposable income
a.
converge as income grows.
b.
generally move together.
c.
diverge as income grows.
d.
show no clear relationship.
3. If real disposable income is $300 billion and real consumer
expenditures are $250 billion, it can be assumed that
a.
the government is spending the difference.
b.
the difference is being invested.
c.
households are saving the difference.

12. d.
transfer payments make up the difference.
4. The relationship between consumer spending and disposable
income is called the
a.
conjunction function.
b.
consumption function.
c.
aggregate demand function.
d.
marginal spending function.
5. The Marginal Propensity to Consume (MPC) is defined as the
change in
a.
C over the change in DI.
b.
income over the change in disposable income.
c.
DI over the change in C.
d.

13. total income over the change in net income.
6. The nation's disposable income increases by $400 billion and,
as a result, consumer spending increases by $320 billion.
Therefore, the MPC equals
a.
0.16.
b.
0.20.
c.
0.60.
d.
0.80.
e.
0.96.
Figure 8-1
7. Based on the scatter diagram in Figure 8-1, approximately
how much will consumption increase after a permanent tax cut
of $400 billion?
a.
$100 billion

14. b.
$150 billion
c.
$250 billion
d.
$350 billion
8. If income in Austria decreases by 30 million euros and
consumption decreases by 24 euros, then the MPC equals
a.
0.90.
b.
0.80.
c.
0.60
d.
−0.60.
9. To predict the effects of a tax cut on consumption spending,
economists must have some estimate of the
a.
income effect.

15. b.
substitution effect.
c.
relative price effect.
d.
marginal propensity to consume.
10. A movement from one point to an another point on the same
consumption function could be caused due to
a.
changes in wealth.
b.
an increase in the general price level.
c.
decrease in the real interest rates.
d.
changes in disposable income.
Figure 8-2
11. In Figure 8-2, which of the following moves can be

16. explained by a decrease in the price level?
a.
A to B
b.
A to C
c.
A to D
d.
A to E
Figure 9-1
12. In Figure 9-1, at $7,000 billion real GDP,
a.
inventories are increasing.
b.
spending falls short of output.
c.
spending exceeds output.
d.
Both a and b are correct.

17. 13. Government stabilization policy
a.
cannot influence investment spending.
b.
can stimulate aggregate demand and thereby induce businesses
to invest, but the amount is not totally predictable.
c.
can stimulate aggregate demand, but investment spending will
not be affected.
d.
can stimulate aggregate demand, but only in the long run.
14. The Japanese economy has been consistently weak
throughout the 1990s. This has caused a slight deflation,
illustrating the
a.
negligible cost of eliminating inflation.
b.
very slow operation of the economy's self-correcting
mechanism.
c.
tendency of inflation to accelerate during recessions.
d.
rapidity with which inflation can be stopped.

18. 15. When money wages rise, the most significant effect on the
aggregate supply curve is that it
a.
shifts outward.
b.
shifts inward.
c.
becomes flatter.
d.
becomes steeper.
16. To predict the effects of a tax cut on consumption spending,
economists must have some estimate of the
a.
income effect.
b.
substitution effect.
c.
relative price effect.
d.
marginal propensity to consume.
17. The principal way in which an economy self-corrects from
an inflationary gap is through

19. a.
deflation, which increases purchasing power.
b.
inflation, which reduces purchasing power.
c.
disinflation, which maintains purchasing power.
d.
price level decreases, which stimulate production.
18. When the inflationary gap is finally eliminated, a long-run
equilibrium is established with a ____ price level and with GDP
____ potential GDP.
a.
higher; equal to
b.
higher; greater than
c.
lower; equal to
d.
lower; greater than
19. An inflationary gap exists when consumers
a.
are saving more than businesses are investing.

20. b.
and businesses are purchasing less than the economy is capable
of producing.
c.
and businesses are demanding more than the economy is capable
of producing.
d.
and businesses are demanding less than the full employment
level of output.
20. The typical result of an adverse supply shock is
a.
falling output accompanied by accelerating inflation.
b.
falling output accompanied by decelerating inflation.
c.
rising output accompanied by accelerating inflation.
d.
rising output accompanied by decelerating inflation.
21. The case for government stabilization policy is made more
compelling if the
a.
self-correcting mechanism works very slowly.
b.

21. self-correcting mechanism works too fast.
c.
value of the multiplier is very small.
d.
aggregate supply curve is very flat.
22. As the U.S. labor force grows and the nation's capital stock
is augmented by investment, the
a.
price level will rise.
b.
aggregate supply curve shifts inward.
c.
aggregate supply curve shifts outward.
d.
aggregate supply curve becomes steeper.
23. A decrease in the price of resources will cause the aggregate
supply curve to
a.
shift outward.
b.
shift inward.
c.

22. become flatter.
d.
become steeper.
24. Aggregate supply is defined as
a.
how much the economy can produce at zero unemployment.
b.
an amount of output the economy will produce at full
employment.
c.
the relationship between the expenditures schedule and the
leakages schedule.
d.
the relationship between the price level and the quantity of real
GDP supplied.
25. Fiscal policy consists of
a.
taxes and interest rates.
b.
government purchases and defense spending.
c.
the money supply and taxes.

23. d.
taxes and government spending.
26. The government's fiscal policy is its plan to influence
aggregate demand by changing
a.
the money supply.
b.
minimum wage levels.
c.
sales taxes.
d.
taxation and spending.
27. Historically, the government has used fiscal policy to affect
the economy through
a.
central planning.
b.
indicative planning.
c.
aggregate demand.
d.
aggregate supply.

24. 28. The use of spending and taxes by the government to
influence aggregate demand is known as
a.
monetary policy.
b.
governmental policy.
c.
administrative policy.
d.
fiscal policy.
e.
federal policy.
29. The oversimplified formula for the multiplier is misleading
because it ignores the effects of
a.
price-level changes.
b.
the foreign sector.
c.
variable taxes.
d.

25. All of the above are correct.
30. An automatic stabilizer is a feature of the economy that
a.
makes prices "sticky."
b.
reduces its sensitivity to shocks.
c.
maximizes its volatility.
d.
automatically reduces recessionary trends.
31. How does an increase in government transfer payments
affect aggregate demand?
a.
It has the same effect as a tax increase, which lowers AD with a
larger multiplier than a spending decrease.
b.
It has the same effect as a tax cut, which increases AD but with
a smaller multiplier than a change in spending.
c.
It has the same effect as a spending increase, which increases
AD with a larger multiplier than a tax cut.

26. d.
It has the same effect as a spending decrease, which increases
AD with a larger multiplier than a spending decrease.
Figure 11-1
32. In Figure 11-1, the slope of the expenditures schedule is .75
and the government wishes to achieve full employment. It
should
a.
cut spending by 1,000.
b.
increase spending by 1,000.
c.
cut taxes by 1,000.
d.
increase spending by 250.
e.
cut taxes by 250.
33. A bank run involves a large flow of money
a.
into bank depositors' accounts.
b.

27. into checking and savings accounts.
c.
out of depositors' accounts.
d.
out of individuals' cash reserves into money market funds.
34. Barter is a system of
a.
trade without the use of money.
b.
trading one good for another.
c.
the double coincidence of wants.
d.
All of the above are correct.
35. Fiat money is
a.
always backed by gold or silver.
b.
useful in buying Italian cars.
c.
only backed by government decree.

28. d.
not as liquid as precious metals.
37. With the invention of banking, one important aspect of
money was that
a.
banks have some discretion over the money supply.
b.
banks have complete control over the money supply.
c.
governments lost all control over the money supply.
d.
individuals have no discretion over the money supply.
38. One intention of deposit insurance is to reduce the danger of
a.
excess lending.
b.
excess profits.
c.
risky lending.
d.
bank runs.
e.

29. All of the above are correct.
39. Which of the following would be a liability to a bank?
a.
cash in the vault
b.
a loan to a new business
c.
a checking account of a professor
d.
All of the above are correct.
40. The central bank of the United States is known as the
a.
Internal Revenue Service.
b.
Federal Reserve System.
c.
Federal Deposit Insurance Corporation.
d.
Department of Commerce.
41. Technically, the Federal Reserve district banks are
corporations whose stockholders are the

30. a.
state governments in each district.
b.
citizens of the United States.
c.
Departments of Treasury and Commerce.
d.
member banks.
42. Which of the following observations is true?
a.
State governments are the shareholders of the Fed.
b.
The Fed chairman is appointed for a ten year term.
c.
FOMC decisions largely determine short-term interest rates.
d.
Member banks proportionately share all of Federal Reserve's
profits.
43. If the Federal Open Market Committee decides to expand
the money supply, then it will
a.
raise the discount rate to member banks.

31. b.
issue directions to purchase government securities, thus putting
more reserves in member banks.
c.
issue directions to sell government securities, thus taking
reserves from member banks.
d.
order new Federal Reserve notes delivered to member banks.
44. Which of the following statements is correct?
a.
from the bank's point of view, loans to customers are assets of
the bank
b.
from the bank's point of view, loans to customers are liabilities
of the bank
c.
from the customer's point of view, loans to customers are assets
of the customer
d.
from the customer's point of view, loans to customers are
liabilities of the customer
e.
a and b only
f.
a and d only

32. 45. If the banking system has $5 million in excess reserves, and
the required reserve ratio is 25 percent, what is the maximum
amount by which the money supply can be increased?
a.
$25 million
b.
$20 million
c.
$5 million
d.
$2.5 million
46. The required reserve ratio is 10 percent, but banks actually
keep 20 percent on reserve. The actual money multiplier will be
a.
10.
b.
9.
c.
5.
d.
2.
e.

33. 1.
47. If the Fed buys more bonds from the public, and increases
the price it is willing to pay for the bonds, what will happen to
interest rates?
a.
They will rise.
b.
They will fall.
c.
They will remain unchanged.
d.
The relationship between bond prices and interest rates is
unclear.
48. If the Fed decides to buy T-bills, it increases the demand for
T-bills. How will this affect the price of T-bills and the interest
rate?
a.
T-bill prices fall and interest rates fall.
b.
T-bill prices rise and interest rates rise.
c.
T-bill prices rise and interest rates fall.
d.

34. T-bill prices fall and interest rates rise.
2
Introduction
Orion Corporation is a hypothetical organization that deals with
the trade of retail goods. It’s headquarter is located in Denver,
Colorado and has been in business since 1996 AD. Since the
inception of Orion Corporation, it has been growing rapidly and
dealing mainly with consumer grocery products which range
from milk to meat to noodles to pasta, and so on. Orion
Corporation operates primarily within Colorado and has 25
locations so far. The primary objective of Orion corporation is
to provide qualitative products at an affordable price and
maintain a healthy relationship with its customers. This
company had been operating only via its onsite location up until
2010 and now has shifted it’s business tactics to online
shopping as well. Orion Corporation has its online website
orionco.org where customers can place an online order for
onsite pickup or home delivery.
Current Operating System
Orion has been using the Windows 7 Professional edition as its
operating system that has been able to support its 64-bit CPU.
This OS has provided Orion Co. with Windows Anytime
upgrade features so that they can upgrade and unlock features of
any OS they chose. This professional version of Windows 7 has
provided with features like encrypting file system, software
restriction policies, remote desktop server location, backup to a
network location, support up to 192 Gb of RAM, and so on.

35. Orion Co. is using Windows 7 Professional edition that uses a
single-core processor (AMD K) for carrying out the instruction.
The OS has helped Orion Co. to make computational
calculations and logical decision making. Lately, Orion Co. has
been facing several problems with its operating system like
overheating, slacking performance, and excessive power
consumption. As Orion Co. try to increase their clock speed, the
heat generated by the chip of OS is significantly increasing.
Thus, the problem of freezing occurs whenever several
instructions are provided to the operating system.
Proposed
Solution
Orion Corporation has been growing significantly which also
signifies the increase in the number of transactions made and
website use. This means more pressure is put on the current
single-core operating system to carry out several instructions at
a time.
The author proposes the use of a dual-core operating system
(Intel Core i7) for Orion Corporation which will eliminate most
of the current problems faced by the company and increase
efficiency. A dual-core operating system will be able to enhance
the performance of OS as information or instruction is divided
into multiple units and multiple processors will execute the
instructions simultaneously. Thus, multiple requests or

36. instructions can be carried out eliminating the problem system
freezing. It will be beneficial when multithreading or using
multiple applications of office suites. Likewise, the use of
multiple core operating systems will be cost-efficient as it uses
shared resources like peripheral and memory and due to the less
cost for cooling. Overall, the proposal of a dual-core operating
system would be beneficial for Orion Corporation.
Steps to upgrade processor and core
We need to understand and identify the best processor for our
computer to upgrade our processor and core. Since, Orion
Corporation has been using dell desktops with Windows 7 OS
(AMD K6 processor), upgrading it to Windows 10 OS with Intel
Core i7 is recommended.
The following steps need to be followed while choosing to
upgrade the processor and core:
Step 1: Identify and understand the motherboard and processor
and select the processor or core that is compatible with the
motherboard.
Step 2: Identify the motherboard model using the command
prompt to find basic information about the computer

37. motherboard. “Use the following command in the command
prompt: wmic baseboard get the product, manufacturer, version,
serial number.” (Jenic, 1)
Step 3: Determining processor socket type used by the
motherboard by entering the motherboard name, model number,
socket, and chipset in the search engine.
Step 4: Purchasing the processor or core that matches the
motherboard. We can purchase a processor or core depending
upon the price, compatibility, and computational needs.
Step 5: Installing the new compatible processor by turning off
the computer, removing the side panel and locating the
motherboard, removing the current heat sink and processor and
replacing it with a new one, plugin the heat sink and new
processor, reassemble all the part and restart the computer.
System requirements for upgrade:
The system requirement to update the Windows 10 OS for Orion
Corporation’s dell laptops are:
· Processor: 1 gigahertz (GHz) or faster processor or SoC
· RAM: 1 gigabyte (GB) for 32-bit or 2 GB for 64-bit
· Hard disk space: 16 GB for 32-bit OS or 20 GB for 64-bit OS
· Graphics card: DirectX 9 or later with WDDM 1.0 driver
· Display: 800 x 600

38. Scheduling Algorithms (Week 2).
Working Environment:
Orion Corporation has 25 locations over Colorado and will be
maintain all their transaction in a virtualized environment. The
main server would be in the head office of Denver which would
partition the physical server to several virtual servers by using
virtualization software. These virtual environments would be on
all 25 locations and working independently.
Orion corporation would be using a single server that would run
on Windows operating system. Since, Orion co. has several

39. locations and would be doing transaction thousands of time a
day, they want to maintain uniformity across all their locations,
they would be working on a virtual environment. The company
would be using server virtualization which would include
storage virtualization, network virtualization, and workload
management. The working in virtualized environment will help
Orion Co. to cut down the cost by the efficient use of resources
(not over or underutilization of servers and hardware),
distribute workloads across virtual machines which would
improve the turnaround and response time.
Types of scheduling algorithm used:
Orion Corporation has decided to use First Come First Serve
(FCFS) and Round Robin scheduling algorithm for their
business. Orion has chosen these two-scheduling algorithms
based upon the decision mode, throughput, starvation, response
time, effect of process and overhead of scheduling algorithm.
The scheduling algorithms has been briefly described below:
First Come First Serve (FCFS):
The FCFS scheduling algorithm is a simple concept where the
first in the line is served first no matter what priority is held by

40. the task. In other words, the scheduler in FCFS executes the
process in the order they are submitted to the processor. The
benefits and challenges of using FCFS in Orion Corporation has
been listed below:
Benefits:
· FCFS is better for long process because we do not have to
switch CPU often. Once, the CPU has been allocated it would
permit the process no matter what time it consumes.
· It is simple method, easy to implement, and minimum
overhead on processes due to few movements of processes.
· There will be no starvation as it gives equal priority to all the
task. Thus, task or process with low priority do not have to wait
to be executed.
Challenges:
· The primary effect of FCFS is the convey effect that means
smaller process have to wait for a long time if they are behind
the long process.
· The average wait time, response time is poor compared to
other scheduling algorithm and it also penalizes the short
processes or input output bound processes. Round Robin:
A Round Robin scheduling algorithm is the most popular and
preemptive version of FCFS where time quantum is allocated to
each process. In other words, a certain time is allocated to every
process which would be executes in cyclic way. The benefits
and challenges of Round Robin scheduling algorithm has been

41. listed below:
Benefits:
· Since RR does not depend upon the time burst, it is
implementable and effective in the transaction processing
system, time sharing system, and general-purpose system.
· There is fair treatment for all processes as CPU is allocated to
all processes for a certain time quantum.
· It is beneficial for short processes due to excellent response
time.
· The resources are utilized in a balanced order, there is no
starvation, and the overhead is also minimum.
Challenges:
· There may be the context switching overhead due to time
quantum. If there is a long process and the quantum time is
insufficient, the process will go back to the queue and must wait
again for other process to execute.
· Determination of time quantum is critical because if its is too
short, it causes frequent content switching lowering the CPU
efficiency and if its too long, it causes poor response time for
short interactive process.
· The process with long burst time may be starved.
Concurrency Mechanism (Week 3)

42. Enterprise Environment:
Orion Corporation has decided to work on a distributed
operating system environment. Across 25 locations, several POS
and computers would be interconnected using a shared
communication network (LAN network). The main office server
would be responsible for overlooking all the branch office
network, server, and the CPU. The reason Orion Corporation
has chosen to work on distributed environment is that it is
possible for users to get access to files which are not present in
their branch system but on some other branch system using the
shared communication network. This will allow remote access
to devices like computers and POS connected within the
network and would be beneficial when one of the system goes
down as there is always another system they can be used while
the broken one is under maintenance.
Since Orion Corporation is a grocery chain, they would be using
hundreds of POS and computers / CPUs. If one of the POS
within the network fail, it will not affect the other POS / system
as they are independent to each other. Likewise, resources
would be shared which will allows fast and durable
computation, workload on host POS would be reduced, and its
scalability feature allows to increase or decrease the number of
POS or system in the network.
Semaphore Concurrency Mechanism:
Concurrency is bound to happen in Orion Corporation’s system

43. as hundreds of people would be using POS at any given time
that means several POS would be competing for resources like
process time to access I/O devices or a memory block of main
memory. Issues like deadlock, live-lock, race condition, and
starvation may arise which could be solved with a proper
concurrency mechanism.
It is suggested Orion Corporation to adopt semaphore
concurrency mechanism to manage the concurrent processes in
our shared main memory. Semaphore uses integer value to
signal among processes. We can perform three operation using
the semaphore concurrency mechanism i.e. initialization (given
non-integer value), increment for unblocking of process, and
decrement for blocking of the process. The primitive semiSignal
(s) would be used to transmit the signal, semiWait (s) would be
used to receive the signal, and if no signal is transmitted the
process will be suspended in a semaphore concurrency
mechanism.
Initially the semaphore is initialized to a no- negative value.
Then the semiWait operation will decrease the value of
semaphore. If the semaphore value become anything other than
negative, it continues the execution of process otherwise the
process execution is blocked. Likewise, the semiSignal
operation will increase the value of semaphore. If the
semaphore value becomes zero or less than zero, the process
execution is blocked by semiWait operation, and anything else

44. is unblocked. Thus, it will help to solve the concurrency
problem in Orion Corporation’s operating system.
Introduction
Orion Corporation is a hypothetical organization that deals with
the trade of retail goods.
It’s headquarter is located in Denver, Colorado and has been in
business si
nce 1996 AD. Since
the inception of Orion Corporation, it has been growing rapidly
and dealing mainly with
consumer grocery products which range from milk to meat to
noodles to pasta, and so on.
Orion Corporation operates primarily within Colorado and has
25 locations so far. The primary

45. objective of Orion corporation is to provide qualitative products
at an affordable price and
maintain a healthy relationship with its customers. This
company had been operating only via its
onsite location up until 2010 and
now has shifted it’s business tactics to online shopping as well.
Orion Corporation has its online website orionco.org where
customers can place an online order
for onsite pickup or home delivery.
Current Operating System
Orion has been using the
Windows 7 Professional edition as its operating system that
has been able to support its 64
-
bit CPU. This OS has provided Orion Co. with Windows
Anytime
upgrade features so that they can upgrade and unlock features of
any OS they chose. This
professional v
ersion of Windows 7 has provided with features like encrypting
file system,

46. software restriction policies, remote desktop server location,
backup to a network location,
support up to 192 Gb of RAM, and so on.
Orion Co. is using Windows 7 Professional edi
tion that uses a single
-
core processor
(AMD K) for carrying out the instruction. The OS has helped
Orion Co. to make computational
Introduction
Orion Corporation is a hypothetical organization that deals with
the trade of retail goods.
It’s headquarter is located in Denver, Colorado and has been in
business since 1996 AD. Since
the inception of Orion Corporation, it has been growing rapidly
and dealing mainly with
consumer grocery products which range from milk to meat to
noodles to pasta, and so on.
Orion Corporation operates primarily within Colorado and has
25 locations so far. The primary
objective of Orion corporation is to provide qualitative products
at an affordable price and

47. maintain a healthy relationship with its customers. This
company had been operating only via its
onsite location up until 2010 and now has shifted it’s business
tactics to online shopping as well.
Orion Corporation has its online website orionco.org where
customers can place an online order
for onsite pickup or home delivery.
Current Operating System
Orion has been using the Windows 7 Professional edition as its
operating system that
has been able to support its 64-bit CPU. This OS has provided
Orion Co. with Windows Anytime
upgrade features so that they can upgrade and unlock features of
any OS they chose. This
professional version of Windows 7 has provided with features
like encrypting file system,
software restriction policies, remote desktop server location,
backup to a network location,
support up to 192 Gb of RAM, and so on.
Orion Co. is using Windows 7 Professional edition that uses a
single-core processor
(AMD K) for carrying out the instruction. The OS has helped
Orion Co. to make computational