ECN 211_FinalPart11

ECN 211_FinalPart11 - ECN 211 SLN 45992 Macroeconomic...

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ECN 211 SLN 45992 Final Exam Professor Happel Macroeconomic Principles Fall 2006 8:40-9:55 MW Part I (75 points). Select only one answer per question. 1. In terms of the aggregate demand-aggregate supply (AD/AS) graph, which of the following is false ? a. AD and AS are flow variables and show what households and firms desire to do at different levels of the price index. b. AD is downward sloping because of the law of demand. c. The AD curve holds expectations constant. d. The AD curve holds taxes and the money supply constant e. The AS curve holds technology constant. 2. According to class discussions of money which of the following is false ? a. A primary function of money is to serve as a medium of exchange. b. An effective medium exchange has properties that include being divisible, durable, and hard to counterfeit. c. The first universal money were gold and silver nuggets. d. The first gold and silver coins were token coins. e. The first goldsmiths’ receipts were fully-backed currency. 3. For the U.S. from 1630 to the end of the Revolutionary War, which of the following is false ? a. “Country Pay” was commodity money, and the money supply growth was unstable under Country Pay. b. England let the colonies issue their own coins up to the time of the American Revolution. c. The American colonies issued their own paper money, but England stopped this before the Revolution. d. To finance the Revolutionary War, the Continental Congress issued paper money called Continentals, and this led to inflation. e. Alexander Hamilton, as the first secretary of Treasury, led the fight in favor of the First Bank of the U.S. 4. For the U.S. for the period 1791 to 1811, which of the following is false ? a. The U.S. Constitution says that the federal government has the right of coinage, and that is all it says about money. b. The First Bank of the U.S. was chartered for 20 years and did a poor job in regulating banks and maintaining sound money. c. The Coinage Act of 1792 put the U.S. on a bimetallic standard (both gold and silver). d. Gresham’s Law says that bad money drives good money out of circulation. e. In the 1790’s silver was the bad money according to Gresham’s Law.
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5. For the U.S. for the period 1811 to 1836, which of the following is false ? a. After the charter of the First Bank of the U.S. expired in 1811, there was a sharp decrease in the money supply and the number of banks decreased significantly from 1811 to 1816. b. Nicholas Biddle, as President of the Second Bank of the U.S., pursued a tight monetary policy. c. Andrew Jackson effectively closed down the Second Bank when he vetoed the bill to renew its charter in 1832. d. Congress changed the gold-silver ratio at the mint in 1834 and effectively put the U.S. on a gold standard. e.
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ECN 211_FinalPart11 - ECN 211 SLN 45992 Macroeconomic...

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