Mock Midterm _2 AK

Mock Midterm _2 AK - Exam Name_ MULTIPLE CHOICE. Choose the...

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Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Based on our understanding of the model presented in Chapter 3, a reduction in investment will cause: 1) A) an increase in the multiplier B) a reduction in output C) a reduction in the marginal propensity to save D) both (b) and (d) E) a reduction in the multiplier Answer: B 2) Which of the following events will cause a reduction in equilibrium output? 2) A) an increase in taxes. B) a reduction in the marginal propensity to consume. C) an increase in the marginal propensity to save. D) all of the above. E) none of the above. Answer: D 3) The economy in Chapter 3 is in equilibrium when which of the following conditions is satisfied? 3) A) total saving equals zero. B) total saving equals investment. C) output equals consumption. D) consumption equals saving. E) all of the above. Answer: B 4) We would expect which of the following to occur when the central bank conducts an open market purchase of bonds? 4) A) a reduction in the money multiplier B) a reduction in the monetary base (H) C) an increase in the money supply D) an increase in the money multiplier Answer: C 5) Based on our understanding of the IS - LM model that takes into account dynamics, we know that a
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This note was uploaded on 01/14/2010 for the course ECON 101 taught by Professor Miyanishi during the Fall '08 term at UC Davis.

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Mock Midterm _2 AK - Exam Name_ MULTIPLE CHOICE. Choose the...

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