xm1-w05 - Econ 102 Exam I ECON 102/100 February 10, 2005...

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Econ 102 Lecture 100 Exam I Form 1 ECON 102/100 February 10, 2005 Section Day Time Location GSI 101 F 2:30-4 205 DENN Jooyong 102 F 11:30-1 373 Lorch Sue 103 F 1-2:30 373 Lorch Jooyong 104 M 4-5:30 351 DENN Joanne 105 M 2:30-4 330 DENN Joanne 107 F 1-2:30 110 DENN Sue 108 M 8:30-10 373 Lorch Seb · Do NOT open this exam booklet until instructed to do so! · Please take a moment to complete the identification information on the scantron. Indicate your NAME, discussion SECTION number, FORM number, and UM ID number. THIS IS WORTH TWO POINTS ON THE EXAM! · The exam has 100 points and is designed to take about 60 minutes to complete. However, you’ll have approximately 80 minutes. Check that you have all 11 pages of the exam. · Read the questions and these instructions carefully! · Use the space provided in this booklet and the back of the pages to work out the answers to the multiple choice problems. Use the space provided on the actual page for the short answer questions. · You can use only NON-graphing calculators. · For multiple choice questions, you get 3 points for a correct answer, 0 points for a blank, and 0 points for a wrong answer. There are NO penalties for guessing. · Sign the honor code below! Honor Code : I did not use any unauthorized aid on this exam. Name : (PRINT) _______________________________ UM ID # : _______________________________ Signature : _______________________________
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Part I: Multiple Choice: (26 questions, 3 pts each = 78 pts) Pick the best answer among the given choices. 1. In the measurement of GDP, a country’s imports a) Do not enter the calculation because they are not produced in the country. b) Enter positively because imports are used in the production of other goods. c) Enter positively because GDP includes production abroad. d) Enter negatively because imports reduce the country’s productivity. e) Enter negatively because other components of expenditure include imports. Use the following information to answer questions 2 through 4. Suppose you are given the following information about a closed economy, where r is the real rate of interest 000 , 25 $ = Y Real GDP = Income 000 , 5 $ = T Net tax collections 000 , 4 $ = G Government purchases 15 . 0 = s Marginal propensity to save (MPS) r T Y s S pr 500 , 1 ) ( + = Private saving function; r I 500 , 2 200 , 4 $ = Total investment function 2. What is the government deficit or surplus? a) $20,000 surplus b) $1,000 surplus c) No surplus or deficit at all d) $1,000 deficit e) $20,000 deficit 3. What is the equilibrium real interest rate r ? What is the corresponding level of investment at this rate of real interest? a) 5% and $4,075 b) 5% and $5,075 c) 0.5% and $3,875 d) 0.5% and $4,075 e) 0.5% and $5,075 2
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4. Now the government decides to lower the tax T from $5,000 to $4,500. What is the new equilibrium level of r? a)
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This test prep was uploaded on 04/02/2008 for the course MATH 425 taught by Professor Buckingham during the Winter '08 term at University of Michigan.

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xm1-w05 - Econ 102 Exam I ECON 102/100 February 10, 2005...

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