Key for Midterm 3 Spring 2008 excerpts

Key for Midterm 3 Spring 2008 excerpts - Economics 100 Key...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Economics 100 – Key for Midterm 3 Spring 2008 Question Answer Notes 1 B 50 million 0.50 100 million = or 50 % 2 E 45 million 0.90 50 million = or 90 % 3 D 5 million 0.11 45 million = or 11 % 4 C 2007 2000 2000 220 200 0.10 200 P P P - - = = or 10 % 5 B See handout 3c 6 C See handout 3c 7 A See handout 3c 8 E Inflation results in increases in nominal income earned by households and nominal prices paid by households. Therefore, the real purchasing power of households is not impacted by inflation. 9 A In RBC theory, nominal prices and wages are flexible so the economy is always operating at potential GDP on the Solow growth curve. Page 1 of 4
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Economics 100 – Key for Midterm 3 Spring 2008 10. Redo handout 3d with the following information. 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0% -2.0% -1.0% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0% Inflation rate growth rate of real GDP Solow growth curve AD ( M + v = 6%) SRAS ( P e = 2%) AD ( M + v = 10%) c. The initial equilibrium growth rate of real GDP is 4 %
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 4

Key for Midterm 3 Spring 2008 excerpts - Economics 100 Key...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online