ECON 201 - Final Exam

ECON 201 - Final Exam - Department Economics of Cal Poly...

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Department of Economics ECON 201 Cal Poly State University Steve Hamilton Winter Quarter,2008 ATi'"::ffi|, x,'. K' !',:,?.i': 5b L l9a.it'c l. Suppose that in 2000 the economy produced 25 pears at I dollar each and 50 packs of cigarettes at 2 dollars per pack. Suppose that in 2001 the economy produced 50 pears at 3 dollars each and 50 packs of cigarettes at 3 dollar per pack. What is nominal GDP in 2001? a. $125 b. $150 c. $300 d. $425 e. none ofthese are correct 2. Suppose that in 2000 the economy produced 25 pears at 1 dollar each and 50 packs of cigarettes at 2 dollars per pack. Suppose that in 2001 the economy produced 50 pears at 3 dollars each and 50 packs of cigarettes at 3 dollar per pack. What is real GDP in 200I, using 2000 as the base year? a.$125 b. $150 c. $300 d.$425 e. none ofthese are correct 3. Assume a long-run aggregatesupply curve. What would happen to the price level if the AD curye were to decrease over time? a. the price level would decrease b. the price level would not change c. the price level would increase d. all of the above; prices would cycle e. insuffrcient information to choose anv of the 4. Which of the following changes would produce a falling price level within the aggregate demand - aggregate supply framework? a. a decrease in aggregate supply b. an increase in aggregate demand c. a decrease in aggregate demand d. any of the above could explain or predict a falling price level e. none ofthe above are correct 5. Which of these statements tend to be correct? a. nominalinterest rates decrease as inflation occurs b. nominal interest rates increase as inflation occurs c. nominal interest rates are not related to inflation rates d. nominal interest oscillate as inflation occurs e. none ofthe above are correct 6. Which of the following are tools of monetary policy? a. reserve requirements b. discount rate c. open market operations d. all of the above are tools of monetary policy e. none of the above are tools of monetary policy I rt/ l- \1./
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T.Overtime, the long run aggregate supply curve contracts (declines). What is the effect of this contraction when we assume no change in aggregate demand? a. real output rises and the price level rises b. real output rises and the price level falls c. real output falls and the price level rises d. real output falls and the price level falls e. all ofthe above are correct because ofthe 8. Suppose the Fed buys $10M in Treasury Securities frgm a bank. whig! 9ltrre following would happen to the money supply, assuming that the required reserve ratio is 50%? a. money supply would exPand $20M b. money supplY would fall $20M c. money supply would exPand $50M d. money suPPlY would fall $50M e. money supPlY would not change 9. Suppose the Fed sells $l0M in Treasury Securities to banks. Which of the following would happen to the money supply, assuming that the required reserve ratio is 50%?
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ECON 201 - Final Exam - Department Economics of Cal Poly...

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