Sample Questions for Midterm 2

Sample Questions for Midterm 2 - Sample Questions for...

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Sample Questions for Midterm II The set of objective type questions is only a preview. Along with this, you should make sure to cover in detail all the HWs preceding the Midterm. The essay questions and numerical type questions on the Midterm will be drawn ONLY out of these set of questions. There is thus no element of surprise on the second half of the exam. However, you should start thinking about the answers to these questions well in advance and discuss with me in case of difficulties. Chapter 6 ____ 1. When the economy is at its full employment Real GDP, the unemployment rate is equal to a. zero. b. the natural unemployment rate. c. the frictional unemployment rate. d. the structural unemployment rate. ____ 2. If the economy is in a recessionary gap, a. Real GDP is greater than Natural Real GDP. b. Real GDP is equal to Natural Real GDP. c. Real GDP is less than Natural Real GDP. d. the (actual) unemployment rate is less than the natural unemployment rate. e. a and d ____ 3. When the economy is producing Real GDP at a level at which the LRAS curve intersects the AD curve, the economy is a. in a recessionary gap. b. in long-run equilibrium. c. in an inflationary gap. d. operating at less than full-employment output. ____ 4. The development of the Internet has altered the job search process. This has __________ the frictional unemployment rate and __________ the natural unemployment rate. a. increased; increased b. increased; decreased c. decreased; increased d. decreased; decreased ____ 5. If the economy is self-regulating and in a recessionary gap, a. wages and prices will fall. b. wages will fall, but prices will rise. c. neither wages nor prices will change. d. wages will rise, but prices will fall. e. wages and prices will rise. ____ 6. Which of the following statements is false? a. If the economy is self-regulating, wages are flexible. b. The frictional unemployment rate equals the natural unemployment rate minus the structural unemployment rate. c. If the economy is producing Natural Real GDP, it is operating at the natural unemployment rate. d. The economy is operating at full employment if it is producing more than Natural Real GDP. e. b and d
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____ 7. In order for Say's law to hold in a money economy, a. there must be more than four goods. b. funds saved must give rise to an equal amount of funds earned. c. funds saved must give rise to an equal amount of funds invested. d. none of the above ____ 8. According to classical economists, the relationship between the amount of funds households plan to save and the interest rate is a. indirect. b. inverse. c. direct. d. independent. All Other Goods A B C D E Physical PPF Institutional PPF Good X ____ 9. Refer to the exhibit above. Which point is representative of the economy on its LRAS curve? a. A
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This note was uploaded on 11/28/2010 for the course ECON 201 taught by Professor Dr.sharma during the Spring '08 term at Ohio State.

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Sample Questions for Midterm 2 - Sample Questions for...

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