SecondMT-QUESTIONS-B - EXAM TYPE: B Middle East Technical...

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EXAM TYPE: B 1 Middle East Technical University / Department of Economics Econ 354 / Second Midterm Exam Spring 2010 / May 24, 2010 Instructor: Dr. Emre Özçelik STUDENT’S LAST NAME: STUDENT’S FIRST NAME: STUDENT ID: Read the following instructions very carefully before starting the exam: Any kind of cheating attempt will be immediately documented by the exam proctors on an official “report of cheating”, which will be submitted directly to the Disciplinary Board of the University. A cheating student usually loses her/his whole semester, as s/he fails officially in all the courses s/he is currently taking. There are two parts in this exam. Part I (45 points) consists of 15 multiple choice questions (pp. 2–3). Part II (55 points) consists of two written questions (25 points for Question-1 at p. 4, and 30 points for Question-2 at p. 5). All the questions are required; that is, you must answer all questions in Part I and Part II. Time allowed for Part I: 35 minutes. Time allowed for Part II: 65 minutes. Calculators are not allowed. Your mobile phones must be closed during the exam. Use the optic forms to mark your answers for the multiple choice questions in Part I. Do not forget to mark your exam type on the optic forms. Exam type of this sheet: B. Be precise and concise in your answers to the questions in Part II. Before starting to write, allow yourself a few minutes to plan your answer. For Question-1 at p. 4, you have to fit your answer on the one-page space provided below the question. It depends on you whether or not to draw graphs in this question. That is to say, drawing any graphs is not required in this question. Precise verbal explanations will suffice. For Question-2 at p. 5, you can use both page-5 and the empty page-6. Drawing relevant graphs are required for this question, along with precise verbal explanations. Extra answer sheets are not allowed and will not be given.
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EXAM TYPE: B 2 PART I. (15 x 3 = 45 POINTS) MULTIPLE CHOICE QUESTIONS 1. Which one of the following expressions is correct? A) Monetary policy is unambiguously more effective in influencing national income under flexible exchange rates than under fixed exchange rates. B) Monetary policy is unambiguously more effective in influencing national income under fixed exchange rates than under flexible exchange rates. C) Fiscal policy is unambiguously more effective in influencing national income under flexible exchange rates than under fixed exchange rates. D) Fiscal policy is unambiguously more effective in influencing national income under fixed exchange rates than under flexible exchange rates. Use the following information to answer questions 2-3: Draw an upward-sloping BP curve on the Y-i plane. Mark a point on the BP curve and name it A. Suppose that income is Y 0 and interest rate is i 0 at point A. First, keeping income constant at Y 0 , increase the interest rate from i 0 to i 1 . Mark point B at (Y 0 , i 1 ). Secondly, keeping interest rate constant at i
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This note was uploaded on 05/26/2010 for the course ECON 354 taught by Professor Emre during the Spring '10 term at Middle East Technical University.

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SecondMT-QUESTIONS-B - EXAM TYPE: B Middle East Technical...

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