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Unformatted text preview: Econ 201 – Prof. Gordon Northwestern University Midterm #2 Fall 2002 Department of Economics November 11, 2002 Answer Key PART A (30 pts.) Question Answer Question Answer Question Answer 1 B 11 A 21 D 2 C 12 C 22 A 3 D 13 B 23 B 4 C 14 D 24 D 5 D 15 B 25 E 6 B 16 A 26 A 7 D 17 E 27 C 8 A 18 B 28 D 9 B 19 C 29 A 10 A 20 C 30 D PART B (Short answers, 30 pts.) 1. (4 pts) a) What is the labor force? 4 The labor force includes people that are either employed or unemployed but actively looking for a job. Ron, Ran, Bob and Tim are part of the labor force. Lea is excluded because she stays at home. Jim is working in the underground economy and is thus officially not looking for a job. b) What is the unemployment rate? 1/4 Among Ron, Ran, Bob and Tim, only Tim does not have a job. 2. (8 pts.) The victories affect ONLY the AD curve in the short run, through an increase in consumption for any given price level (recall that AD=C+I+G+X-M). The LAS and SAS curves do not shift in the short run. They price level (recall that AD=C+I+G+X-M)....
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This note was uploaded on 09/04/2010 for the course ECON 201 taught by Professor Witte during the Spring '08 term at Northwestern.
- Spring '08