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Unformatted text preview: Sonoma State University Department of Economics ECN 304 Florence Bouvet Fall 2010 Midterm 2 Name (Please Print): _ Scores: ~J Part I: ./50 Part II: ,'1. )/50 ;).2;> \ ~ . j ~ ro ,.-- Total: & Q...) 1100 Please Note: 1. Succinct responses are strongly encouraged. Any erroneous or too much irrelevant information will count against you. Therefore, you will not receive full credit if you provide a complete correct answer but also include erroneous or too much irrelevant information. No credit will be given to answers that do not address the question. 2. Show all your work. Make sure you show all equations used in each calculation. Answers without supporting calculations will receive very little credit. 3. For most questions, you are given a lot more space than you really need. When time is called, please stop work immediately. ~'" Multiple Choice Questions ( 50 points) I) Which list ranks assets from least to most liquid? a. currency, fine art, stocks b. currency, stocks, fine art c. fine art, currency, stocks (fl. fine art, stocks, currency 2) In the US, most spells of unemployment are a. short, but most unemployment observed at any given time is long term. ~. short, and most unemployment observed at any given time is short term. c. long, and most unemployment observed at any given time is long term. d. long, but most unemployment observed at any given time is short term. 3) The demand for money is a. Negatively related to the price level ~. Negatively related to the interest rate c. Negatively related to real GDP d. None of the above 4) Structural unemployment is unemployment caused by: a. Generous unemployment benefits b. Minimum-wage legislation c. The time it takes workers to search for and find a job ~ Sectoral shifts 5) The concept of monetary neutrality in the classical model means that an increase in the money supply will increase: a. Real GDP b. Real interest rate Nominal interest rate d. Both saving and investment by the same amount 6) During the transition to the steady state in the Solow model (assuming that the country starts with a level of capital per worker smaller that its steady state value) Output per worker falls b. Labor force participation rises c. The growth rate of capital rises d. All of the above....
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