2009-ECON 202 Mid-course test

2009-ECON 202 Mid-course test - 1 ECON 202 Test, 2009 NAME:...

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1 ECON 202 Test, 2009 NAME: (FIRST NAME) :________________ (SURNAME) :______________ STUDENT NUMBER: TUTOR: TUTORIAL GROUP: (tutorial time and day) INSTRUCTIONS 1. Answer all questions. There are 4 sections and 12 pages to this handbook. 2. Total marks: 100 3. Answers must be written in this handbook and in the appropriate spaces provided. Provide answers to the multi- choice section on the summary answer sheet (page 2). Please do not separate the summary answer sheet from the handbook. 4. Time allowed: 50 minutes GRADE: %
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2 ECON 202 Test, 2009 Multi-choice Section (Section I) Tick the box ( ) corresponding to what you choose to be the most correct answer. If you change your mind, make the tick into a cross (X) and tick your new choice. NAME____________________________________________________ STUDENT NUMBER________________________________________ a b c d 1. 2. 3. 4. a b c d 5. 6. 7. 8. a b c d 9. 10. a b c d 15. a b c d
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3 Section I: 16 Multiple-Choice Questions (Total 48 Marks – 3 Marks each). Choose the most correct answer. 1. Which of the following is one of Blanchard’s basic set of propositions on which most macroeconomists agree? (3 MARKS ) a) Fiscal policy can affect real output in the short run, but not in the medium run and long run b) Monetary policy can affect real output in the short run, medium run and long run c) In the short run, fluctuations in real aggregate demand do not affect real output d) In the short run, fluctuations in real aggregate demand affect real output 2. A Laspeyres price index weights prices by historical consumption patterns, while a Paasche price index weights prices by current consumption patterns. If people substitute away from things whose prices rise, and prices change by different amounts: (3 MARKS) a) The Laspeyres index will underestimate average price movements, while a Paasche index will overestimate average price movements b) Both indices will overestimate average price movements c) The Laspeyres index will overestimate average price movements, while a Paasche index will underestimate average price movements d) It depends whether average prices are rising or falling 3. Which of the following would be most likely to decrease equilibrium real GDP? (3 MARKS) a) An decrease in real government spending b) An decrease in real taxation c) An decrease in the marginal propensity to save d) An decrease in nominal government spending 4. If interest rates are zero, and there is excessive supply of credit or money: (3 MARKS) a) An expansionary monetary policy will be able to increase demand, but an expansionary fiscal policy will not b) An expansionary fiscal policy will be able to increase demand, but an expansionary monetary policy will not c) Neither an expansionary monetary policy nor an expansionary fiscal policy will be able to increase demand d) A major contractionary monetary policy will have no effect on the economy
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4 5. In the basic closed economy IS-LM model, if investment is unresponsive to interest rates: (3 MARKS) a)
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This note was uploaded on 05/24/2011 for the course ECON 201 taught by Professor Paulclacott during the Fall '10 term at Victoria Wellington.

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2009-ECON 202 Mid-course test - 1 ECON 202 Test, 2009 NAME:...

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