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2010_SPRING_midterm1 - ECO320L-Macroeconomic Theory Midterm...

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ECO320L-Macroeconomic Theory Midterm 1 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. Good Luck! 1
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Total Exam Grade: ( ......... /100pts) Multiple Choice Questions ( ......... /32pts) (4pts each) 1. When we try to measure real GDP and the price level, if we underestimate the growth in real GDP, we will (a) always underestimate the rate of inflation. (b) sometimes underestimate the rate of inflation. (c) always overestimate the rate of inflation. (d) sometimes overestimate the rate of inflation. 2. The income-expenditure identity is best paraphrased as (a) all spending generates income. (b) all profits are used for investment spending. (c) on average, consumers cannot save. (d) on average, government can spend no more than what it collects in income taxes. 3. When a macroeconomic aggregate is procyclical a it grows faster than GDP. b its deviations from trend generally change before the deviations from trend in GDP do. c its deviations from trend generally change more that the deviations from trend in GDP.
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