HW3 - 1 Homework 3 Chapters 9-12 DUE IN CLASS ON FRIDAY...

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Homework 3, Chapters 9-12 (3/20/09) DUE IN CLASS ON FRIDAY MARCH 27 Chapter 9 [1]The economic expansion that began in 1991 1. lasted approximately five years 2. lasted approximately twelve years 3. is still ongoing 4. was the longest expansion in U.S. history [2]In Freedonia there is an increase in the real price of a key raw material, say, for example, oil. Using the analysis developed in class, in the classical model which of the following occurs? 1. The will be an increase in the demand for labor. 2. There will be a decrease in equilibrium output. 3. There will be an increase in the equilibrium real wage. 4. Each of 1-3 will occur. 5. Neither of 1-3 will occur. [3]Which of 1-3 is a false statement? 1. In terms of the decline in real output, the Great Depression was more severe in the U.S. than in the rest of the world. 2. In comparison with the rest of the world the U.S. recovery from the Depression was relatively slow. 3. Without fear of contradiction it can be said that FDR’s New Deal pulled the economy out of the Great Depression. 4. Each of 1-3 is true. 5. Each of 1-3 is false. Chapter 10 [4]How long did the recession of 2001 last? 1. all of calendar year 2001 2. from March until November 2001 3. the recession continued into 2002 4. the recession began March 2001 and ended in June 2001 [5]If (net) taxes decrease by $10 billion and the MPC is 6/7, what is the ultimate change in GDP? 1. A $70 billion increase. 2. A $70 billion decrease. 3.
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HW3 - 1 Homework 3 Chapters 9-12 DUE IN CLASS ON FRIDAY...

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