Midterm 2 Spring 2008 excerpts

Midterm 2 Spring 2008 excerpts - Instructions: This is a...

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Instructions: This is a closed-book exam. You have 75 minutes to complete the exam. You must hand in the exam by 1:45. Use neither notes nor the text to assist in the preparation of your answers. The examination consists of two parts: 25 multiple-choice questions and one problem. You are to answer the multiple choice questions on the Scantron sheet. You are to answer the problem in the space provided. Good Luck! Multiple Choice Questions 1. In the capital market, households supply financial capital to firms and government through _______; and receive a ________ in return. a. borrowing, real interest rate b. borrowing, real wage rate c. saving, real interest rate d. saving, real wage rate e. working, real wage rate 2. In the product market, which of the following buy goods and services produced by firms? a. households for consumption b. firms for investment in capital c. government for government purchases d. rest of the world for net exports e. all of the following 3. If government purchases and transfer payments are greater than tax receipts, then a. the government budget is in surplus and the government must buy Treasury bills and bonds. b. the government budget is in surplus and the government must sell Treasury bills and bonds. c. the government budget is in deficit and the government must buy Treasury bills and bonds. d. the government budget is in deficit and the government must sell Treasury bills and bonds. 4. The largest component of GDP is a. consumption. b. investment. c. government spending. d. imports. e. exports. 5. Which of the following are limitations of using real GDP per person as a measure of economic welfare? a.
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Midterm 2 Spring 2008 excerpts - Instructions: This is a...

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