Final02 - December 17, 2002 ECONOMICS 102 Professor...

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December 17, 2002 Professor McClelland ECONOMICS 102 FINAL EXAM PLEASE NOTE: The exam has 4 parts. Each of the 4 parts is of equal value. Total time: 2 hours. Answer the last part (Part D) on the sheet provided. For each of the other 3 parts (A through C), PLEASE USE A SEPARATE EXAM BOOK FOR EACH PART; i.e., submit a total of 3 exam books. On the outside of each book please put (a) your name, (b) your TA's name, and (c) the question (A, B, or C) being answered. PART A (30 minutes) (1) Recently the Federal Reserve cut interest rates hoping to simulate the American economy. (a) Explain why open market operations of the Fed cause interest rates to decline. (b) Explain how lower interest rates can stimulate the economy. If you use symbols and causal arrows in any part of your answer, be sure to define the symbols used. (2) If interest rates abroad do not change, will this lowering of American interest rates help or hurt American exports? Explain your answer. (3)
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This test prep was uploaded on 04/01/2008 for the course ECON 1120 taught by Professor Wissink during the Fall '05 term at Cornell University (Engineering School).

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Final02 - December 17, 2002 ECONOMICS 102 Professor...

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