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Unformatted text preview: ECO320L-Macroeconomic Theory Final 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 calculations and derivations. Just anwers will not receive any points. Good Luck! 1 Total Exam Grade: (........./100pts) Multiple Choice Questions (........./30pts) (3pts each) 1. How many of the following business cycle facts can be explained if the primary cause of business cy- cles is temporary changes in total factor productivity: procyclical consumption, procyclical investment, procyclical employment, and procyclical real wages? a one b two c three d four 2. The opportunity cost of money is (a) zero. (b) the inflation rate. (c) the real interest rate. (d) the nominal interest rate. 3. An open-market operation refers to (a) changing the money supply by changing taxes. (b) changing the money supply by changing government spending. (c) an exchange of money for interest-bearing debt by the monetary authority. (d) an exchange of domestic money for foreign money by the monetary authority. 4. If an increase in the level of the money supply results in a proportionate increase in prices with no effect on any real variables, we say that a the Fisher relationship holds. b money is neutral. c money is superneutral. d money is the most preferred store of value 5. In the small open economy that we studied in the class, in response to a permanent increase in total factor productivity: (i) trade balance decreases...
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- Fall '08