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ME Quiz Prof Gordon

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  ECON 311 - Intermediate Macroeconomics (Professor Gordon) First Midterm Examination: Fall 2011 Answer sheet YOUR NAME: _______________________________________ Circle the TA session you attend: Ofer 9AM 4PM Nuri 4PM  Juan 9AM INSTRUCTIONS: 1.   The exam lasts  1 hour . 2.   The exam is worth 60 points in total: 30 points for the multiple choice questions and 30 points for the two analytical  problems. 3.   Write your answers for part A (the multiple choice section) in the blanks below.  You won’t get credit for circled answers in the multiple choice section. 4.   Place all of your answers for part B in the space provided . 5.   You must show your work for part B questions. There is no need to explain your answers for the multiple choice questions. 6.   Good luck! PART A: Multiple Choice Problems Answer multiple choice questions in the space provided below. PLEASE USE CAPITAL LETTERS. 1)   2)   3)   4)   5)   6)   7)   8)   9)   10)   11)   12)   13)   14)   15)   16)   17)   18)   19)   20)   21)   22)   23)   24)   25)   26)   27)   28)   29)   30)   MC Q1 Q2 Total  PART A: Multiple Choice Problems   1) The inflation rate is the A) measure used to calculate the price level. B) measure used to calculate the cost of borrowing money. C) percentage increase in the average level of prices. D) percentage increase in the average level of wages. Answer: C 2) The multiplier measures the A) number of steps it takes to move from one equilibrium to another. B) rise in saving resulting from a rise in income. C) marginal propensity to invest. D) rise in equilibrium GDP resulting from a one dollar rise in planned autonomous expenditures. Answer: D 3) Real money balances refers to A) the currency part of the total money supply. B) the money supply divided by the price level. C) the money supply times one minus the interest rate. D) the non-interest-earning part of the money supply. Answer: B 4) The average output produced per worker is one way of measuring A) inflation. B) the interest rate. C) employment. D) productivity. Answer: D 5) Which of the following would shift the LM curve? A) an increase in the tax rate B) an increase in the real money supply C) a reduction in business confidence D) All of these. Answer: B  6) The cars produced by Toyota (a Japanese company) in its factory in Kentucky ________ in Japanese GDP. Distributed profits to Toyota’s shareholders _______ in Japanese GNP (assume that Toyota’s owners are all Japanese). A) count, count B) count, do not count C) do not count, count D) do not count, do not count Answer: C 7) If a the government of Country Z is running a budget deficit and net exports are zero, then A) investment is greater than saving. B) investment and saving are equal. C) saving is greater than investment. D) none of the above. Answer: C 8) If real GDP for a given year is $2400 billion and nominal GDP is $2400 billion, A) this year is the base year for the GDP deflator. B) the GDP deflator for this year is 1.25. C) the GDP deflator for this year is 0.8. D) the GDP deflator for this year is 1.10. Answer: A 9) Help in financing our federal budget deficit comes from a ________ amount of net exports, which is called  ________. A) negative, net foreign investment. B) negative, foreign borrowing. C) positive, net foreign investment. D) positive, foreign borrowing. Answer: B 10) Which of the following is not  a reason why an increase in stock market wealth reduces the personal saving rate A) Autonomous consumption depends positively on real net worth B) Autonomous consumption depends negatively on the interest rate C) Higher stock prices generate capital gains D) Saving equals disposable income minus consumption Answer: B  11) Which of the following statements would be true of an economy that can be characterized as being to the left of the IS curve? A) There will be a tendency for the level of output to decrease. B) There will be a tendency for interest rates to fall. C) There is an excess demand for commodities at the existing interest rate. D)   There is an excess supply of commodities at the existing interest rate. Answer: C 12) Over the past two decades, the ratio of European to US values are high for A) hours per capita. B) unemployment rate. C) real GDP per capita. D) labor-force participation rate. E) B and D. Answer: B 13) In the IS-LM model, equilibrium income can be affected by A) monetary policy alone. B) fiscal policy alone. C) both fiscal and monetary policy. D) neither monetary nor fiscal policy Answer: C 14) An increase in the money supply will A) decrease the quantity of money held. B) increase the quantity of money held. C) shift the LM curve leftward. D) None of the above. Answer: B 15) Suppose that in producing a GDP of 3000, goods worth 200 go unsold and are unintentionally added to  business inventories. These goods A) are not counted in total expenditure. B) are part of the investment component of expenditure. C) are nonetheless part of the consumption component of expenditure. D) are classified as net exports and are subtracted from total expenditures. Answer: B
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