311M2Fall03 - Intermediate Macroeconomics 311 (Professor...

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Unformatted text preview: Intermediate Macroeconomics 311 (Professor Gordon) Second Mid-Term Examination Fall, 2003 YOUR NAME: _______________________________ TA: (circle one) David or Zahra Section: (circle one) 9:00am or 3:00pm INSTRUCTIONS: 1. The exam lasts for 1 hour. 2. The exam is worth 55 points in total: - 30 points for the two analytical questions - 25 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. _ _ __ 6. _ _ __ 11. _ _ __ 16. _ _ __ 21. _ _ __ 2. _ _ __ 7. _ _ __ 12. _ _ __ 17. _ _ __ 22. _ _ __ 3. _ _ __ 8. _ _ __ 13. _ _ __ 18. _ _ __ 23. _ _ __ 4. _ _ __ 9. _ _ __ 14. _ _ __ 19. _ _ __ 24. _ _ __ 5. _ _ __ 10. _ _ __ 15. _ _ __ 20. _ _ __ 25. _ _ __ PART A) &&&&&&&& &&&&&& &&&&&& &&& &&& &&&&&&&&&&& &&&& &&&& &&&&&&&& & &&& &&&&&&&&& && &&&&&&& &&& &&&&&&&& 1) The short-run Phillips curve gives A) all possible combinations of real GDP and inflation, for a given set of expectations. B) the actual short-run level of real GDP and inflation. C) the response of real GDP and inflation to supply shocks. D) all possible combinations of real GDP and inflation, for fully adjusted expectations. 2) With a fixed nominal wage the SAS curve is positively sloped because A) business firms are responsive to interest rates. B) the marginal leakage rate is small. C) A decrease in P decreases the real wage and raises profits if output is increased. D) an increase in P decreases the real wage and raises profits if output is increased. 3) The long-run aggregate supply curve is A) vertical at the natural level of income. B) downward-sloping for all income levels above the natural level of income. C) horizontal at the natural price level. D) upward-sloping for all income levels below the natural level of income. 4) If inflation is greater in Italy by 10% than it is in the rest of the world then the purchasing power parity theory predicts that the A) Italian lira would depreciate. B) U.S. dollar would weaken. C) Italian lira would appreciate. D) Italian lira would remain stable. 5) If e is the real exchange rate, e' is the nominal exchange rate, P is the domestic price level, and Pf is the foreign price level, then A) e = e'(P/Pf). B) e = Pf/e'P. C) e = e'(Pf/P). D) e' = e(P/Pf). 6) If firms are willing to produce and sell more output when prices rise, this implies A) a vertical short-run aggregate supply curve. B) a horizontal aggregate supply curve. C) an upward-sloping aggregate demand curve....
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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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311M2Fall03 - Intermediate Macroeconomics 311 (Professor...

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