mt1-f2009 - Economics 100B Midterm #1 Fall 2009 125 points...

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Economics 100B Midterm #1 Fall 2009 125 points total, 80 minutes total Question 1 (10 points total; 6 minutes total) a. (5 points) What has happened to the personal saving rate in the last couple of years? b. (5 points) What does “the recession is over” mean? Question 2 (15 points total; 10 minutes total) In the article “How Did Economists Get It So Wrong?,” Paul Krugman writes “[University of Chicago economist and Cal Ph.D. John] Cochrane declares that high unemployment is actually good. ‘We should have a recession. People who spend their lives pounding nails in Nevada need something else to do.’ Personally I think this is crazy. . . Can anyone seriously claim that we’ve lost 6.7 million jobs because fewer Americans want to work? But . . . if you start from [Cochrane’s] assumption[s] . . . you have to conclude that unemployment is voluntary and recessions are desirable.” a. (5 points) Prof. Olney presented a 5-step method for critiquing arguments. Simply list each of the 5 steps in the method. b. (2 points) In the passage above, what conclusion is Krugman challenging?
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This note was uploaded on 02/04/2011 for the course ECON 100B taught by Professor Wood during the Fall '08 term at University of California, Berkeley.

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mt1-f2009 - Economics 100B Midterm #1 Fall 2009 125 points...

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