# xm3a-w04 - Econ 102 Deardorff Winter Term 2004 Exam...

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Econ 102 - Deardorff Exam III (with Answers) Winter Term 2004 Page 1 of 16 Form 0 ECON 102/100 April 28, 2004 Section Day Time Location GSI 101 F 2:30-4 B239 EH Jan 102 W 11:30-1 373 Lorch Justin 103 W 1-2:30 B239 EH Naomi 104 W 4-5:30 B239 EH Mato 105 W 2:30-4 B239 EH Mato 106 W 4-5:30 1068 EH Naomi 107 F 1-2:30 1372 EH Nalin 108 W 8:30-10 330 DENN Justin 109 F 11:30-1 205 DENN Nalin · 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, and showing up in the correct exam room are WORTH TWO POINTS ON THE EXAM! · The exam has 100 points and is designed to take about 90 minutes to complete. However, you’ll have approximately 120 minutes. Check that you have all 15 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 2 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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Econ 102 - Deardorff Exam III (with Answers) Winter Term 2004 Page 2 of 16 Form 0 Multiple Choice: (39 questions, 2 pts each = 78 pts) Pick the best answer among the given choices. 1. Which of the following statements is FALSE in an economy with flexible prices (long run), but is TRUE in an economy with sticky prices (short run)? a. Fiscal policy has no effect on real variables. b. Monetary policy does affect real variables. c. Changes in aggregate demand do not affect employment. d. Changes in aggregate demand do not affect real wages. e. None of the above. 2. If the dollar value of a country’s exports is greater than the value of its imports, then in equilibrium a. net foreign investment must be positive. b. net foreign investment can be positive, zero, or negative. c. net foreign investment must be negative. d. no investment is flowing into the country. e. both a. and d. are true. 3. When a country’s central bank increases the money supply, a unit of money ______ value in terms of the domestic goods and services it can buy and ______ value in terms of the foreign currency it can buy. a. gains; gains b. gains; loses c. loses; gains d. loses; loses e. loses; gains or loses 4. Which of the following is NOT one of the effects of inflation? a. Firms incur costs associated with changing their prices. b. It redistributes wealth in an arbitrary way between borrowers and lenders. c. It causes tax distortions with respect to interest income and capital gains.
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xm3a-w04 - Econ 102 Deardorff Winter Term 2004 Exam...

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