mt2p031 - ECO 2013-01 Spring 2003 Second midterm, 6 March...

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ECO 2013-01 Spring 2003 Second midterm, 6 March 2003. Questions and answers are most likely not in the same order as the test you took, but these are the same questions. The correct answers are listed after all the questions. 1) The supply of real GDP is a function of A) the total expenditures of consumers, investors and government. B) the sum of wages, salaries, corporate profits, rents and interest. C) only the state of technology. D) the quantities of labor, capital and the state of technology. 2) At potential GDP A) there is no unemployment but there is not necessarily full employment. B) there is no unemployment and there is full employment. C) unemployment is at its natural rate. D) None of the above are correct. 3) The long-run aggregate supply curve A) is negatively sloped. B) is positively sloped. C) is vertical at the level of potential GDP. D) is horizontal at the level of potential GDP. 4) For movements along the long-run aggregate supply curve, A) potential GDP is dependent on the price level. B) the prices of goods and services change while the prices of productive resources hold steady. C) the price level and the money wage rate change in the same proportion. D) All of the above are correct. 5) The short-run aggregate supply curve A) is vertical. B) shows the impact changes in the price level have on the quantity of real GDP when resource prices are constant. C) illustrates the level of potential real GDP. D) shifts because of changes in the price level. 6) Which of the following occurs while moving along a short-run aggregate supply curve? A) The money wage rate and the price level change by the same percentage. B) The money wage rate changes and the price level is constant. C) The price level changes and the money wage rate is constant. D) Neither the price level nor the money wage rate changes.
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In the above figure, which movement illustrates the impact of a falling price level and a constant money wage rate? A) C to B) to C) to D) to 8) One reason that the aggregate demand curve has a negative slope is that when the domestic price level rises, A) firms produce more goods and services. B) firms produce fewer goods and services. C) people substitute toward more imported goods and services. D) peoples' wealth increases. 9) A decrease in consumption expenditure resulting from a decrease in expected future consumer income would be described by A) a rightward shift of the aggregate demand curve. D) a leftward shift of the aggregate demand curve. 10) In the macroeconomic short-run equilibrium, A) there is structural unemployment. B) there is frictional unemployment. C) the economy might not be at the natural rate of unemployment. D) All of the above answers are correct.
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mt2p031 - ECO 2013-01 Spring 2003 Second midterm, 6 March...

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