Key for Final Spring 2006

Key for Final Spring 2006 - Economics 100 Key for Final...

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Economics 100 – Key for Final Exam Spring 2006 Page 1 of 4 Question Answer Notes (2 points each for a total of 70 points) 1 B 2 A 3 E 4 D 5 A 6 C 7 B 8 D 9 B 10 D 11 E 12 A 13 D 14 A 15 B 16 B 17 B 18 D 19 D 20 C 21 A 22 D 23 D 24 C 25 D
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Page 2 of 4 Question Answer Notes 26 C 27 B 28 A 29 B 30 A 31 B 32 C 33 D 34 C 35 B
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Economics 100 – Key for Final Exam Spring 2006 Page 3 of 4 36. Consider the following data for the income-expenditure model (15 points): The consumption function is 500 0.50* CY =+ so that 500 C = , MPC = 0.50 and T = 0. Other autonomous expenditure P I GN X ++ is 2500. Potential real GDP is Y * = 8000. a. On the graph below, plot and label the PAE line, the Y = PAE line, and the potential real GDP Y * line using the data above. Indicate the short-run equilibrium level of real GDP ( Y eq ) with dotted lines. 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 planned aggregate expenditures (PAE) real GDP ( Y ) PAE line Y = PAE potential GDP b. The recessionary gap is defined as ( * eq YY ), which is 2000 in this example.
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Key for Final Spring 2006 - Economics 100 Key for Final...

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