Exam 3-key -...

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Unformatted text preview: NAME_______________________________________________________________________________________ Exam 3 - ECO 215 SPRING 2008 CUTLER MULTIPLE-CHOICE questions Please, select the letter which best answers each question, and enter it into the answer key table provided at the end of the exam. Each multiple-choice question is worth 1 point. 1. If the economy starts in long-run equilibrium, a permanent fiscal expansion will cause (a) An increase in exchange rate, E (b) A decrease in exchange rate, E (c) An increase in output, Y (d) A decrease in output, Y (e) Shifting of the AA curve up and to the right Answer: B 2. In the long-run equilibrium, after a permanent money-supply increase there follows: (a) An increase in exchange rate, E (b) A decrease in exchange rate, E (c) An increase in output, Y (d) A decrease in output, Y (e) Both (b) and (d) Answer: A 3. Which one of the following statements is most accurate? (a) In the long run, foreign output depends only on the available domestic supplies of factors of production. (b) In the short run, domestic output depends only on the available domestic supplies of factors of production. (c) In the long run, domestic output depends only on the available domestic supplies of factors of production. (d) In the long run and in the short run, domestic output depends only on the available domestic supplies of factors of production. (e) None of the above. Answer: C 4. Which one of the following statements is most accurate? (a) Factors of production can only be over-employed in the short run. (b) Factors of production can only be under-employed in the short run. (c) Factors of production can be over- or under-employed in the long run. (d) Factors of production can be over- or under-employed in the short run. (e) None of the above. Answer: D 5. Which one of the following statements is most accurate? (a) In general, consumption demand rises by less than income. (b) In general, consumption demand rises by less than disposable income. (c) In general, consumption demand rises by more than disposable income. (d) In general, consumption demand rises by more than income. (e) In general, consumption demand rises by the same amount as disposable income rises. Answer: B 6. The domestic currency price of a representative foreign expenditure basket is (a) P, the domestic price level (b) E, the nominal exchange rate (c) P times E, the domestic price level times the domestic price level (d) P * , the foreign price level (e) P * times E, the foreign price level times the nominal exchange rate Answer: E 7. The domestic currency price of a representative domestic expenditure basket is (a) P, the domestic price level...
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Exam 3-key -...

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