201FWin06 - FINAL EXAM (120 Points = 35 + 85) 201...

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FINAL EXAM ( 120 Points = 35 + 85 ) 201 Macroeconomics Winter 2006 Northwestern University Prof. Gordon TA : Jesse De Lille NAME : MULTIPLE CHOICE SOLUTION SHEET (35 Points) 1. C 21. E 2. C 22. C 3. B 23. B 4. D 24. B 5. C 25. A 6. B 26. B 7. C 27. A 8. B 28. B 9. A 29. B 10. A 30. A 11. C 31. C 12. B 32. C 13. A 33. A 14. D 34. A 15. C 35. C 16. D 17. C 18. D 19. A 20. B
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MULTIPLE CHOICE QUESTIONS 1. Which of the following is not an asset for a bank? a. excess reserves b. holdings of US government securities c. checking account balances held by depositors d. mortgage loans made by the bank 2. Which of the following does not belong in M1? a. the coins in your pocket b. Jodi’s checking account c. the cash in the vault in the bank downtown d. the travelers’ check that Scott has left over from last summer 3. Two myths about the Great Depression of the 1930s are that the Fed _______ while Roosevelt’s New Deal ________. a. reduced interest rates too much; raised taxes too much b. did nothing; ended the Depression c. raised interest rates too much; made the Depression worse d. raised interest rates too much; reduced taxes too much 4. The following combination of phrases is the best description of the Japanese economy in the 1990s: ________ housing prices and _________ GDP deflator a. rising, falling b. rising, rising c. falling, rising d. falling, falling 5. Which of Randy’s assets is most liquid? a. the US savings bond his grandparents gave him b. his collection of 1950s baseball cards c. the $20 bill in his pocket d. the 100 shares of Microsoft stock he bought last fall
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6. Government spending equals 500, investment equals 300, C = 120 + 0.4*DI, NX = 600 – 0.04*Y, T = 0.15*Y. What is equilibrium GDP? a. 1834 b. 2171 c. 2352 d. 3362 7. Contrasting the government budget balance, Norway has __________ and the United States has __________. a. a large budget deficit, a large budget deficit b. a large budget deficit, a large budget surplus c. a large budget surplus, a large budget deficit d. a large budget surplus, a large budget surplus 8. A side effect of a ____ in taxes and ______ in government spending is called ________. a. cut, cut, crowding in b. cut, increase, crowding out c. increase, cut, crowding out d. increase, increase, crowding in 9. The aggregate supply curve will shift following changes in all but which of the following? a. the price level b. wage rates c. technology and productivity d. available supplies of factories and machines 10. If, at the full-employment level of income, consumers’ savings plans coincide with firms’ investment plans, then a. the equilibrium level of income will be equal to the full employment level of income b. there will be an inflationary gap c. firms will find their inventories increasing d. the economy will be producing less than potential output
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11. Which of the following was not a cause of the transition from a Federal government budget surplus in 1999 to a big deficit in 2004? a. Crash in the stock market
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201FWin06 - FINAL EXAM (120 Points = 35 + 85) 201...

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