321Review01Ch01-02 - Instructor : Kim, H.H. Spring 2011...

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Intermediate Macro Analysis Spring 2011 Economics 01:220:321 1 Review Questions Chapter 1. 1. Macroeconomists study all of the following issues EXCEPT the: a. determinants of inflation. b. relative market shares of General Motors and Ford. c. growth of total production in the United States. d. amount of imports and exports between the United States and Japan. 2. An example of a controlled experiment is: a. astronomers formulating the “big bang” theory of the origin of the universe by making observations through the Hubble telescope. b. economists analyzing the effects of an increase in the money supply by examining output, interest rates, and inflation following a large increase in the money supply. c. biologists modifying Darwin’s original theory of evolution after examining newly found fossils. d. physicians testing the effects of aspirin on the incidence of heart disease by following two groups of men who differ only in their intake of aspirin. 3. If real GDP is growing rapidly, which of the following is most likely to occur? a. a recession b. a depression c. higher unemployment d. inflation 4. The variable that is likely to be exogenous in a model that explains production in a small firm within a large industry is the: a. amount of output produced by the firm. b. price of the firm’s inputs. c. number of workers hired by the firm. d. amount of machinery employed by the firm. 5. All of the following are reasons why wages and/or prices may be sticky in the short run EXCEPT: a. long-term labor contracts often set wages in advance for up to three years. b. many firms leave their product prices unchanged for long periods of time in order to prevent current customers from “shopping around.” c. it is costly for firms to print new price lists and advertise frequently changing prices. d. firms are already charging the highest prices people will pay, so there is no reason to change them. 6. The market in which the assumption of continuous market clearing seems to be LEAST applicable is the: a. stock market. b.
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This note was uploaded on 03/24/2011 for the course ECON 321 taught by Professor Sani during the Spring '08 term at Rutgers.

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321Review01Ch01-02 - Instructor : Kim, H.H. Spring 2011...

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