Fall2018_practiceMT3 (2).pdf - Name ID Economics 320L Fall...

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1 Name: ID #: Economics 320L, Fall 2018 Practice Midterm 1 Please put all papers away. No calculators, no cell phones, no computers: nothing electronic is allowed. The exam is scheduled for 80 minutes. There are 65 points total on the exam. Part 1: Definitions (3 points each) 1) Random Walk Theory of Consumption: 2) Monetary Neutrality: 3) User cost of capital: 4) Reservation wage: 5) Money Multiplier:
2 Part 2: Long Question on AS-AD Model (20 points total) Show what our AS-AD model predicts will happen to the variables in the table below in both the short-run (SR) and long-run (LR) in response to a decrease in Animal Spirits ( SP ). Show all of your work . No points will be awarded for unjustified answers. Use back of page if necessary. All graphs should be fully labeled. P Y r C I SR LR W/P N
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