MT1MCVersionASol - ECO 320L Spring 2009 Professor Beatrix Paal Midterm 1 name 1 The most direct effect of an increase in the growth rate of average

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ECO 320L Spring 2009 Professor Beatrix Paal Midterm 1 name: 2/11/2009 1. The most direct effect of an increase in the growth rate of average labor productivity would be an increase in A) the inflation rate. B) the unemployment rate. C) the long–run economic growth rate. D) imported goods. 2. During recessions, the unemployment rate ___________ and output ___________. A) rises; falls B) rises; rises C) falls; rises D) falls; falls 3. The highest and most prolonged period of unemployment in the United States over the last 125 years occurred during A) World War II. B) the 1890s Depression. C) the 1990–1991 recession. D) the Great Depression of the 1930s. E) the current recession. 4. From 1800 to 1940, the price level in the United States A) trended neither upward nor downward. B) fluctuated wildly. C) declined slowly. D) increased slowly. 5. If the price level was 100 in 1999 and 102 in 2000, the inflation rate was A) 102%. B) 20%. C) 2%. D) 0.2%. Version A Page 1
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6. Data on exports and imports for the United States over the period from 1890 to 2001 show that A) the United States had large trade deficits throughout this entire period. B) the United States had large trade surpluses throughout this entire period. C) the percentage of total output exported by U.S. firms fell dramatically during World War I and World War II. D) a higher percentage of U.S. goods was exported in recent years than in earlier years. 7. The peak in U.S. government spending as a percent of GDP occurred during A) World War II. B) the 1960s war on poverty. C) the Great Depression. D) the 1990s war on drugs. 8. Why were the U.S. government budget deficits of the 1980s and 1990s so unusual from a historical point of view? A) It was the first time the U.S. government had ever run deficits. B) In the past, deficits were usually that large only in wartime. C) It was the first time that deficits were accompanied by very high rates of inflation. D) It was the first time that deficits diverted funds from other productive uses, such as investment in modern equipment. 9. Positive analysis of economic policy A) examines the economic consequences of policies but does not address the question of whether those consequences are desirable. B) examines the economic consequences of policies and addresses the question of whether those consequences are desirable. C) generates less agreement among economists than normative analysis. D) is rare in questions of economic policy. 10. Keynes was motivated to create a macroeconomic theory different from classical theory because A) he believed in government intervention in the economy. B) he believed in the idea of the invisible hand.
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This note was uploaded on 10/25/2010 for the course ECO 320L taught by Professor Kendrick during the Fall '10 term at University of Texas at Austin.

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MT1MCVersionASol - ECO 320L Spring 2009 Professor Beatrix Paal Midterm 1 name 1 The most direct effect of an increase in the growth rate of average

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