Midterm 3 - Form A - Answer Key

Midterm 3 - Form A - Answer Key - Form A Midterm 3...

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Form A Midterm 3 Economics 101 San Diego State University, Fall 2008 1. Crowding out refers to the fact that a) increases in government spending increase equilibrium output. b) increases in government spending put upward pressure on interest rates which decreases private investment. c) increases in government spending lead to increases in aggregate expenditure. d) all of the above. 2. The Aggregate Demand curve is downward-sloping because a) higher equilibrium prices (P*) are associated with higher equilibrium output (Y*). b) lower equilibrium prices (P*) are associated with higher equilibrium output (Y*). c) lower equilibrium prices (P*) are associated with lower equilibrium output (Y*). d) all of the above. 3. Which of the following cause the Aggregate Demand curve to shift to the right? a) Expansionary monetary policy and contractionary fiscal policy. b) Contractionary monetary policy and expansionary fiscal policy. c) Expansionary monetary policy and expansionary fiscal policy. d) Contractionary monetary policy and contractionary fiscal policy. 4. The Fed can cause the Aggregate Demand curve to shift to the right by a) buying bonds. b) increasing the discount rate. c) selling bonds. d) increasing the required reserve ratio. 5. The demand for labor is the a) marginal product of labor. b) the price of output. c) marginal product of labor times the price of output. d) marginal product of labor divided by the price of output. 6. Firms hire workers until a) the nominal wage equals the marginal product of labor. b) the real wage equals the price of output. c) the real wage equals the marginal revenue product of labor. d) the nominal wage equals the marginal revenue product of labor. Page 1
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Form A 7. Which of the following correctly describes the link between prices and output in the LONG- RUN on the production side? a) There is a positive relationship between price and output in the LONG-RUN. b)
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This note was uploaded on 07/29/2009 for the course ECON 101 taught by Professor Bansak during the Spring '07 term at San Diego State.

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Midterm 3 - Form A - Answer Key - Form A Midterm 3...

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