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Midterm 2 Review_Questions_-_S10

Midterm 2 Review_Questions_-_S10 - 1 Topic 4 Goods Market 1...

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3482398cdc709dcb1ba327c84d8b667c0f952185.doc 1 Topic 4:  Goods Market 1. The desired level of capital stock ( K * ) will _______ if the expected future marginal product of  capital ( MPK f increases. 2. The desired level of capital stock ( K * ) will _______ if the price of capital ( P K ) increases. 3. The desired level of capital stock ( K * ) will ______ if the real interest rate, ( r ) increases. Topic 5:  The Asset Market 4. Suppose Sally has the following list of assets: o $45 currency in her purse o A $100 bill in her jewelry box at home o $2,200 in a local savings account o $500 in a chequing account a) What is the dollar value of Sally’s assets that are considered part of M1? b) What is the dollar value of Sally’s assets that are considered part of M2? Use the information in Table 1 to answer Questions 5 and 6: Table 1 Money Item Amount ($ million)
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Midterm 2 Review_Questions_-_S10 - 1 Topic 4 Goods Market 1...

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