Midterm 2 Version 1

Midterm 2 Version 1 - ECON 102: Introductory Macroeconomic...

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Unformatted text preview: ECON 102: Introductory Macroeconomic Analysis SECOND MIDTERM EXAM, Version 1 November 10, 2010 This exam contains 30 multiple choice questions. Identify the letter of the choice that best completes the statement or answers the question. Each question is worth an equal number of points. Be sure to answer questions on the bubble answer sheet provided. Any questions answered on the test question sheets will not be counted. Calculators are allowed. _______________________________________________ Please write your name on the test sheet and on the bubble sheet. VERY IMPORTANT : Write 1 in the space provided on the bubble sheet to indicate the version of your exam. Both the test sheet and the bubble sheet must be turned in at the end of the exam. _______________________________________________ 1. Increases in the price level will a. lower consumption because goods and services are more affordable. b. raise consumption because some goods and services are more affordable. c. raise consumption because real wealth increases. d. lower consumption because real wealth decreases. 2. All other things being equal, a rise in interest rates in the United States will cause the yen price of the dollar in international exchange markets to _________. i.e., the dollar ________ in value against the yen. a. increase; appreciates b. increase; depreciates c. decrease; depreciates d. decrease; appreciates Figure 12-1 3. Refer to Figure 12-1. Which of the points in the above graph are possible short-run equilibria, where unemployment is not at the natural rate? a. A and B b. A and C c. A and D d. B and D 4. Refer to Figure 12-1. Suppose the economy starts at point C . If government then decreases spending, where will the eventual long-run equilibrium be? a. A b. B c. C d. D 5. What is the yield (or rate of interest) on a bond which matures three years from now, has a price of $10,000, a face value of $10,000, and a coupon rate of 5%? a. 5% b. 4.5% c. 3% d. 2.5% 6. The international trade effect states that a. an increase in the price level will raise net exports. b. an increase in the price level will lower net exports. c. an increase in the price level will raise exports. d. an increase in the price level will lower imports. 7. The Economi st recently reported that the average price of a Big Mac in the United States was $3.00. In Mexico, the average price of a Big Mac was 24 pesos. If purchasing power parity holds, what should be the nominal exchange rate? a. 0.125 pesos per dollar b. 1.25 pesos per dollar c. 8 pesos per dollar d. 10 pesos per dollar 8. If the price level in the United States is 110, the price level is 120 in Mexico, and the nominal exchange rate is 140 pesos per dollar, what is the real exchange rate from the U.S. perspective? (Answers are rounded to the nearest whole number) a. a....
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Midterm 2 Version 1 - ECON 102: Introductory Macroeconomic...

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