Practice Midterm #2

Practice Midterm #2 - Economics 102 Ms. Elizabeth Kelly...

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Economics 102 Name _______________________ Ms. Elizabeth Kelly ID Number _________________ Midterm #2 Section Number _________________ April 22, 1997 TA Name _________________ Version 1 DO NOT BEGIN WORKING UNTIL THE INSTRUCTOR TELLS YOU TO DO SO. READ THESE INSTRUCTIONS FIRST You have 75 minutes to complete the exam, which consists of 5 problems ( Part I ) and 20 multiple- choice questions (Part II). Problems are worth a total of 40 points, and each multiple-choice question is worth 3 points for a total of 60 points. This exam has 10 pages. Please answer Part I on this test booklet making sure that your answers are legible and that you are using complete sentences. Show all work and formulas used. Your explanations will determine the grade . Please answer Part II on your coding sheet with a #2 pencil . Choose the best answer from the five alternatives offered . Be sure to fill in the coding sheet carefully and accurately. How to fill in the coding sheet: 1. Print your last name , first name and middle initial in the spaces marked “Last Name,”“First name,”and “MI.” Fill in the corresponding bubbles below. 2. Print your student ID number in the spaces marked “ Identification Number.” Fill in the corresponding bubbles below. 3. Write your discussion section number under “Special Codes” spaces ABC , and fill in the bubbles. 4. Write your version number under “Special Codes” space D and fill in the corresponding bubble. Discussion sections are as follows: Hyun-Ok Han 357 1.20 R Charles Wassell, Jr. 350 4.00 W 358 2.25 R 361 9.55 F 360 8.50 F 363 11.00 F 368 1.20 F 366 12.05 F Jaeho Cheung 353 9.55 R Takashi Kobayashi 351 4.00 W 355 11.00 R 362 9.55 F 356 1.20 R 364 11.00 F 365 11.00 F 367 12.05 F Costin Borc 352 8.50 R 354 9.55 R 359 2.25 R If you have any questions during the exam, stay seated and raise your hand . When you are finished, please get up quietly and bring your code sheet and this exam booklet to the place indicated by the instructors. Stop, take a deep breath, and think carefully before you answer any questions. There are no intentional “tricks”; however, not all answers are intended to be obvious. Good luck! 1
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Part I. Problem Type Questions (4 problems at 10 points each for a total of 40 points) 1. Suppose Kate can borrow $ 2000 from Chris who lives in Macropia or from Tom who lives in Micropia. From whomever she borrows the money, she needs to pay back $2700 in one year. Assume there are no barriers from borrowing the money from a different country and ignore exchange rate effects. Use the Fisher equation when necessary to answer the following questions. a) (2 pts.) What is the nominal interest rate in Macropia and Micropia? b) (2 pts.) Assume the anticipated inflation is 10 % in both Macropia and Micropia.
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Practice Midterm #2 - Economics 102 Ms. Elizabeth Kelly...

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