mid102-2002

mid102-2002 - Economics 102 Midterm Exam - Spring 2002...

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Economics 102 Midterm Exam - Spring 2002 Professor Lee Ohanian Answer all Questions Keep in mind that coherent and clear answers will get more points. Question 1: True, False, or Uncertain, and explain. No credit without an explanation. 5 Points each. (1a) Gross Domestic Product is an overestimate of macroeconomic activity because it does not include non-market output. consumers substitute away from goods whose price rises. (1c) Economic models are useless because they leave out lots of details about the economy. (1d) Suppose GDP = $100, consumption = $70, investment = $20, and government spending equals $10. This implies that both imports and exports must be $0. (1e) Suppose GNP = $100 and NNP = $90. This implies that indirect business taxes = $10. Question 2 - 15 points Consider the following simple model, where a variable with a ±bar²over the top of it means the variable is ³xed. Y
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mid102-2002 - Economics 102 Midterm Exam - Spring 2002...

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