PracticeMT#2_A (1) - Name Banner Economics 320L Practice...

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Name: Banner #: Economics 320L Practice Midterm 2 Please put all papers away. No calculators, no cell phones, no computers: nothing electronic is allowed. The exam is scheduled for 80 minutes. There are ? points total on the exam. Part 1: Definitions (2 points each) 1) Monetary Neutrality: 2) Automatic Stabilizers: 3) Impact Lag: 4) Laffer Curve: 5) Quantity Equation:
Part 2: Short Questions (30 points) I- What are the similarities and major difference between the traditional business cycle facts and the modern business cycle facts? Why is this important? (10 points) II- Some economists argue that the Fed is to blame for most of the post-WWII recessions in the US. Summarize the evidence for this view. (10 points) III- Discuss how unobservable variables make countercyclical policy difficult to implement in practice. (10 points)
Part 3: Long Question (40 points) a) In the last two months, Consumer Sentiment has fallen by 10 percent. Fill in the table below describing the predicted effects of a decrease in CS on the economy. Show all your work

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