2007 FALL TEST 5-2A

2007 FALL TEST 5-2A - TEST 5-2A ECO 2013, Fall 2007...

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TEST 5-2A 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 5-2 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. 3. Suppose the rate of inflation is 3% and the gap between actual and natural GDP is 1%. According to the Taylor rule, the Fed’s target nominal interest rate will be a. 3%. b. 5%. c. 7%. d. 9%. e. 11%. 4. According to the quantity equation of exchange, if the rate of growth of the money supply is 5%, the rate of growth of real GDP is 3%, and the rate of growth of the velocity of money is 2%, then the rate of inflation will be a. zero. b. 1%. c. 2%. d. 3%. e. 4%. 5. The _____ of the euro over the past year has the European Central Bank worried that the aggregate-expenditure line on the European 45 o diagram will shift _____. a. depreciation … down b. depreciation … up c . appreciation … down d. appreciation … up 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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9. The consumer price index was 3.5% higher in October 2007 than in October 2006, partly as a result of the _____ of the dollar. This represents an inflation rate that is _____ than the Fed’s preferred rate. a.
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2007 FALL TEST 5-2A - TEST 5-2A ECO 2013, Fall 2007...

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