ECON202midterm2_s08

ECON202midterm2_s08 - ECON 202, SPRING 2008 Malhar Nabar...

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ECON 202, SPRING 2008 Malhar Nabar April 17, 2008 MID TERM II Instructions. The maximum score is 60. Please answer all THREE questions. Show all your work. Simply writing down an answer (even if it happens to be the correct one) without adequate demonstration of how you arrived at your answer will not get you full credit. You may use a 1. ( Twenty points ) State True or False and provide your reasons (no credit if no reasons are provided). Ten points for each part. a. If labor productivity grows at a faster rate than wages, the tradeo/ between in±ation and un- employment worsens (i.e. every rate of unemployment will now be associated with a higher rate of in±ation). b. The root cause of hyperin±ations is entirely monetary, i.e. the money supply grows at an extremely rapid rate and this causes prices to rise at an equally rapid rate as suggested by the Quantity Theory of Money. 2.
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This note was uploaded on 06/15/2010 for the course ECON 202 taught by Professor Nabar during the Spring '08 term at Wellesley College.

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ECON202midterm2_s08 - ECON 202, SPRING 2008 Malhar Nabar...

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