sample midterm summer

sample midterm summer - Econ 100B UCSC Sample Midterm...

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Econ 100B Instructor: Yi Sun UCSC Summer 2007 Sample Midterm Part A (20%) Multiple choice questions: Pick up your best choice for the questions 1) When nominal GDP falls for a given period, we know with certainty that: A) the price level (GDP deflator) has decreased. B) real output and the price level (GDP deflator) have both decreased. C) either real output or the price level (GDP deflator) have decreased. D) real output has increased and the price level has decreased. E) real output has decreased. Answer: ___ 2) Based on our understanding of consumption and saving, we know that the marginal propensity to consume and the marginal propensity to save must: A) sum to exactly one. B) be equal to the multiplier. C) sum to less than one. D) sum to more than one. E) be equal to each other. Answer: ___ 3) When C = c 0 + c 1 Y D , a reduction in c 0 will cause which of the following to decrease? A) equilibrium disposable income. B) demand. C) equilibrium income. D) all of the above. E) none of the above. Answer: ___ 4) Which of the following events would cause an increase in the size of the multiplier? A) a reduction in government spending. B) a reduction in taxes. C) an increase in the marginal propensity to save. D) an increase in the marginal propensity to consume. E) none of the above. Answer: ___ 5) Which of the following generally occurs when a central bank pursues contractionary monetary policy? A) the central bank purchases bonds and the interest rate increases. B) the central bank sells bonds and the interest rate decreases.
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This test prep was uploaded on 04/07/2008 for the course ECON 100B taught by Professor Yisun during the Summer '07 term at UCSC.

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sample midterm summer - Econ 100B UCSC Sample Midterm...

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