mid2 practic

mid2 practic - Practice Midterm 2 Spring 2010 Econ 1102-013...

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Practice Midterm 2 Spring 2010 Econ 1102-013 Name: ________________________________________________________(1 RP) (+1 RP for writing name as it appears on the class roster) Section #:_________________(1 RP)_ TA Name: (1RP) (+1 RP for section enrolled in) (+1RP for correct TA name) NO programmable calculators, NO cell phones NO notes, NO collaboration with other students Time limit: 50 minutes Each page may have has its own directions. Follow the directions carefully. For full credit, graphs must be completely LABELED and math work shown. Be sure to justify your answers clearly and precisely for full credit,. Rambling, incoherent or illegible responses shall be penalized even if correct. Points are rewarded for answers consistent with those your instructor would give to the same question. This exam is 6 pages (including this front page), numbered 1-6. 2:______ 3:_______4:_______5:_______ RP:_______ Total:_______
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1102-013 Spring 2010 Practice Midterm 2 Page 2 of 6 QUESTIONS 1 (20 pts) Answer all of the following questions Must show equations and values used for full credit. No work=no points, even if the answer is correct. 1. (4 pt) The four components of aggregate demand are: Consumption, Investment, Government Expenditure, Net Exports For questions (2)-(5), show how the AD or AS line would shift in the diagram above. Assume you start at equilibrium, unless stated otherwise. 2. (2 pt) The government decides to build more roads and highway. (1 pt for AD, 1 pt for right OR 2pt for right shift of LR-AS) 3. (2 pt) Show how the economy returns from (2.) to an extended AD-AS equilibrium without government intervention. (1 pt for AS, 1 pt for left. If shift LR-AS in (6), give zero points if shift LRAS left)) 4. (2 pt)There is a sudden decrease in oil prices. 5. (2 pt) Show how the economy returns from (4.) to an extended AD-AS equilibrium if the central bank uses monetary policy. (1 pt for AD, 1 pt left) 6. (2 pt) What event could cause the change shown in the diagram above? A war (anything that decrease long run production is an acceptable answer) 7. (6 pt) In 2004, an undersea earthquake in the Indian Ocean generated a large tsunami. Explain how each of the following changes the price level in the affected countries: the loss of life, damage to roads and buildings, the inflow of monetary aid, and inflow of goods aid. Cyclone kills a bunch of people => AD decreases => decrease local prices
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mid2 practic - Practice Midterm 2 Spring 2010 Econ 1102-013...

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