2007 FALL TEST 3-2A

2007 FALL TEST 3-2A - TEST 3-2A ECO 2013, Fall 2007...

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TEST 3-2A Warrington College of Business ECO 2013, Fall 2007 Department of Economics Before handing in your test, please check that you have bubbled your name and UF ID number correctly and that you have bubbled in an answer for each question. Bubble in your new UF ID number, using the first 8 columns. Your test should have 50 questions. Please check to see that it does. Only non-programmable calculators are allowed. Using a programmable calculator results in a penalty of 15 points. Please bubble 3-2 in the two rows on the lower left corner of your bubble sheet, and A in the upper right hand corner. You do not need to fill in your section number, since we can match your name and UF ID number to it. Please sign the back of your bubble sheet. No way of receiving a message, such as a pager, may be consulted during the test. If you have a pager or cell phone and are expecting an urgent message, leave it and your ID with a proctor, who will relay the message to you. 1. Inventories of houses for sale are now a. about normal. b. at the lowest level since 1989. c. at the highest level since 1989. 2. On the 45º diagram, if the slope of the aggregate expenditure line were greater than one, then the equilibrium would be _____ because to the right of the intersection of the AE line and the 45º line, inventories would _____. a. stable … fall b. stable … rise c. unstable … fall d. unstable … rise e. The question errs. The AE line is parallel to the 45º line. 3. The time inconsistency problem refers most directly to a. asymmetric information. b. the credibility of policy. c. the fallacy of composition. d. the post hoc fallacy. 1 SPECIAL O O O O O O O O O CODES O O O O O O O O O
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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 For this economy, the multiplier is a. 0.5. b. one. c. 1.5. d . 2.0. e. 5.0. 5. An exchange rate was €0.80/$ on October 10, 2006 and _____ on October 10, 2007. Other things the same, this change in the exchange rate shifts the AE line on the U.S. 45º diagram _____. a. €0.71/$ … down b. €0.71/$ … up c. €0.91/$ … down d. €0.91/$ … up e. The question errs. The exchange rate between the euro and the dollar is constant. 6. From October 2006 to October 2007, the price of oil _____ by 37%. Other things the same, this shifts the AE line on the 45º diagram _____. a. fell … down b. fell … up c. rose … down d. rose … up 7. According to the efficient markets hypothesis, if the stock market fell 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. a. fall … depreciate b. fall … appreciate c. rise … depreciate d. rise … appreciate e. The question errs. The efficient market says you what the stock market did last month tells you nothing about what either it or exchange rates will do during the coming month. 8.
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2007 FALL TEST 3-2A - TEST 3-2A ECO 2013, Fall 2007...

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