final spring05

final spring05 - SECTION_ ECON 162B-90, 91 Spring 2005...

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SECTION______ NAME______________________________ ECON 162B-90, 91 Kenny Christianson Spring 2005 May 12, 2005 FINAL EXAMINATION (A) PART I MULTIPLE CHOICE (30 points) Choose the single best answer. 1. Which of the following will cause an increase in aggregate expenditures in the fixed- price Keynesian model? a. an increase in personal income taxes b. a decrease in government military spending c. an increase in import spending d. a decrease in interest rates e. none of the above 2. In a simple fixed-price Keynesian model, assume that the MPC = 0.9 and the MPI = 0.1. Which of the following will lead to the largest increase in real GDP? a. an increase in government spending of $200. b. an increase in taxes of $200. c. a decrease in taxes of $200. d. a decrease in taxes of $225. e. a balanced budget change of $200 3. The paradox of thrift occurs when a. an increase in saving leads to a decline in real GDP. b. a decrease in saving leads to a decline in GDP. c. real interest rates adjust so that saving equals investment. d. households spend their currency in anticipation of higher future inflation rates. e. thrift institutions were forced to close due to the savings and loan crisis. 4. Assume a model with a Keynesian AD curve and an ordinary, upward-sloping AS curve. An increase in resource prices throughout the economy will lead to a. an increase in AD, prices, and real GDP. b.
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This note was uploaded on 11/19/2010 for the course ECON 162 taught by Professor Christianson during the Spring '05 term at Binghamton.

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final spring05 - SECTION_ ECON 162B-90, 91 Spring 2005...

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