311M1Fall05 - Intermediate Macroeconomics 311 (Professor...

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Intermediate Macroeconomics 311 (Professor Gordon) First Mid-Term Examination Fall, 2005 SOLUTION YOUR NAME: _______________________________ INSTRUCTIONS: 1. The exam lasts 1 hour. 2. The exam is worth 60 points in total: 30 points for the three analytical questions, and 30 points for the multiple choice. 3. Write your answers to Part A (the multiple choice section) in the blanks on page 1. YOU WON’T GET CREDIT FOR CIRCLED ANSWERS IN THE MULTIPLE CHOICE SECTION 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. _ _C __ 6. __ A _ _ 11. __ D __ 16. _ _D __ 21. _ _C __ 26. _ _A __ 2. _ _D __ 7. __ A _ _ 12. _ _B _ 17. _ _B __ 22. _ _D _ 27. _ C _ 3. __ B _ _ 8. _ _B __ 13. __ B __ 18. _ _A __ 23. _ _A __ 28. _ _B _ 4. __ D _ _ 9. _ _A_ _ 14. _ C_ _ 19. _ _B __ 24. _ _B __ 29. _ _B __ 5. _ _B __ 10. _ _D __ 15. _ _A __ 20. _ _A __ 25. _ _C __ 30. _ _D _
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1) The “jobless” recovery was an issue in the Presidential election of 2004 because between the Bush inauguration of January, 2001, and October, 2004 A) Payroll survey employment had fallen more than household survey employment B) Payroll survey employment had fallen less than household survey employment C) Payroll survey employment had fallen while household survey employment had risen D) Household survey employment had fallen while payroll survey employment had risen 2) During the expansion phase of the business cycle, business firms become optimistic about their future earning capacity as do banks. Nominal interest rates rise during expansions. Investment lending could be expected to A) stay the same. B) fall if the change in future earnings is thought to be greater than the change in interest rates. C) fall. D) rise if the change in future earnings is thought to be greater than the change in interest rates. 3) If the demand for money was totally independent of the interest rate, the LM curve would ________ and monetary policy would ________. A) be vertical, impotent B) be vertical, quite powerful C) have a positive slope, quite powerful D) have a positive slope, impotent 4) Moving upward along an LM curve, velocity ________ because ________ remains constant while ________ rises. A) falls, real balances, real income B) falls, real income, real balances C) rises, the interest rate, the price level D) rises, real balances, real income E) rises, the interest rate, real balances 5) Consider a large cutback in military spending after the U. S. brings the troops back from Iraq. Which of the following statements best describes the response of the interest rates in different types of economies A) Rises most in closed economy, rises least in small open economy, large open economy in between B) Falls most in closed economy, falls least in small open economy, large open economy in between C) Rises most in small open economy, rises least in closed economy, large open economy in between D) Falls most in small open economy, falls least in closed economy, large open economy in between
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This note was uploaded on 09/04/2010 for the course ECON 311 taught by Professor Gordon during the Spring '08 term at Northwestern.

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311M1Fall05 - Intermediate Macroeconomics 311 (Professor...

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