311M2Fall05 - Intermediate Macroeconomics 311 (Professor...

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Intermediate Macroeconomics 311 (Professor Gordon) Second Mid-Term Examination Fall, 2005 NAME: SECTION: INSTRUCTIONS: 1. The exam lasts for 1 hour. 2. The exam is worth 60 points in total: - 30 points for the two analytical questions - 30 points for the multiple choice. 3. Write your answers to Part A (the multiple choice section) in the blanks on page 1. 4. Place all of your answers for part B in the spaces provided 5. GOOD LUCK! PART A Answer multiple choice questions in the space provided below. USE CAPITAL LETTERS. 1. D 6. B 11. D 16. A 21. B 2. C 7. D 12. D 17. B 22. D 3. C 8. C 13. C 18. D 23. C 4. C 9. B 14. D 19. C 24. A 5. B 10. B 15. C 20. A 25. B
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PART A) MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question (1 point each) 1) An acceleration of nominal GDP growth from, say 4% to 6%, (while holding the natural level of real GDP constant) will A) leave real GDP unaffected in the long run. B) temporarily lower the rate of inflation. C) permanently raise the rate of inflation. D) both A and C 2) Using the charts discussed in lecture instead of the reading item on this topic, which is the most accurate comparison of the first term of Reagan (1981-85) and of Bush (2001- 05). A) Reagan cut taxes less, raised spending less B) Reagan cut taxes more, raised spending more C) Reagan cut taxes less, raised spending more D) Reagan cut taxes more, raised spending less 3) When a nation's national saving falls short of its domestic investment, it must be A) a net lender to foreign nations. B) experiencing a government budget surplus. C) a net borrower from foreign nations. D) experiencing a government deficit. 4) International crowding out in the U.S. economy occurs when A) relatively high U.S. interest rates strengthen the yen, ceteris paribus. B) relatively high U.S. interest rates weaken the dollar, ceteris paribus. C) relatively high U.S. interest rates strengthen the dollar, ceteris paribus. D) none of the above 5) If labor unions negotiate an increase in the nominal wage rate the SAS curve will shift A) downward to the right and output will increase. B) upward to the left and output will decrease. C) upward to the right and output will increase. D) downward to the left and output will decrease. 6) If a nation's budget deficit rises, domestic private investment can remain unchanged through some combination of ________ private saving and ________ importing relative to exporting. A) decreased, more B) increased, less C) decreased, less D) increased, more
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7) At any AD/SAS intersection to the left of LAS, excess ________ in the labor market is putting _______ pressure on the nominal wage. A) supply, upward B) demand, downward C) demand, upward D) supply, downward 8) In constructing the short-run Phillips curve, SP, A) nominal wages are fixed. B) nominal wages are renegotiated.
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311M2Fall05 - Intermediate Macroeconomics 311 (Professor...

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