2007 FALL TEST 3-1A - TEST 3-1A ECO 2013 Fall 2007...

TEST 3-1A Warrington College of Business
ECO 2013, Fall 2007 Department of Economics
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Your test should have 50 questions. Please check to see that it does.
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1. House prices consist of two components, land and structures. Over the past decade, the
_____ component has become a smaller part of the total, which is likely to make house prices
_____ variable than in the past.
a. land … less
b. land … more
c. structures … less
d. structures … more
e. The question errs. Land and structures prices are about equally variable.
2. On the 45º diagram, the aggregate expenditure line usually
a. is horizontal.
b. has a slope between zero and one.
c. has a slope equal to one.
d. has a slope greater than one but less than infinity.
e. is vertical.
3. On the vertical axis of the 45º diagram, normally equilibrium GDP is
a. lower than the vertical intercept of the AE line.
b. equal to the vertical intercept of the AE line.
c. higher than the vertical intercept of the AE line.
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SPECIAL O O O O O O O O O
CODES O O O O O O O O O

4. Consider an economy fully described by the equations
C = 2.5 + 0.5Y
I = 0.8 + 0.1Y
G= 3.0 + 0.0Y
NX= 0.7– 0.1Y
When this economy is in equilibrium, net exports are
5. Consider an economy fully described by the equations
C = 2.5 + 0.65Y
I = 0.8 + 0.13Y
G= 3.0 + 0.0Y
NX= 0.7– 0.18Y
For this economy the multiplier is
6. According to the efficient markets hypothesis, if the stock market rose by 10% over the past
month, you should expect the stock market to _____ during the coming month and the dollar
to _____ during the coming month.
7. A house has two components, land and structure. The price that follows more nearly a
random walk is that of
a. the land.