2010SPRING_midterm2 - ECO320L-Macroeconomic Theory Midterm...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: ECO320L-Macroeconomic Theory Midterm 2 Total 100 points NAME: ............................................................. Some Remarks: 1. Books and notes should be closed. 2. You can use a calculator. Exchange of calculator is not allowed. 3. Do not forget to label axes when you draw a graph. 4. Show your work. Good Luck! Total Exam Grade: (........./100pts) Multiple Choice Questions (........./35pts) (5pts each) 1. The Ricardian equivalence theorem implies that a government debt policy must be handled correctly for the economy to prosper. b the amounts of government spending are neutral. c an increase in government spending has no effect on the economy, as long as there is an equal change in taxes. d the timing of taxes collected by the government is neutral. 2. When there are credit-market imperfections, an increase in government debt in the current period (holding government spending constant) may be advantageous because it a allows credit-constrained consumers to borrow more. b allows credit-constrained consumers to consume more in the current period. c discourages private saving. d all of the above. 3. An increase in the real interest a increases savings for both borrowers and lenders. b increases savings for borrowers, but has an uncertain effect on the savings of lenders....
View Full Document

Page1 / 7

2010SPRING_midterm2 - ECO320L-Macroeconomic Theory Midterm...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online