MT1MC vA - ECO 320L Fall 2010 Professor Beatrix Paal...

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ECO 320L Fall 2010 Professor Beatrix Paal Midterm 1 -- Multiple Choice name: 9/27/2010 60 questions, 1.5 points each = 90 points total 1. _____ is a stock, _____ is a flow. A) GDP; the current account balance B) The government debt; the current account balance C) The government debt; the capital stock D) GDP, the capital stock 2. Positive analysis of economic policy A) examines the economic consequences of policies but does not address the question of whether those consequences are desirable. B) generates less agreement among economists than normative analysis. C) is rare in questions of economic policy. D) examines the economic consequences of policies and addresses the question of whether those consequences are desirable. 3. Keynes was motivated to create a macroeconomic theory different from classical theory because A) he believed in the idea of the invisible hand. B) monetary policy was more important than the classicals acknowledged. C) he believed in government intervention in the economy. D) classical theory appeared inconsistent with the data in the Great Depression. 4. Which statement is incorrect ? A) The stock of government deficit changes through the flow of government debt. B) If the flow of saving is higher than the flow of investment then the current account is in surplus. C) The stock of national wealth consists of physical assets and net foreign financial assets. D) If the flow of gross investment is greater than the flow of depreciation then the capital stock rises. Version A Page 1 PDF Created with deskPDF PDF Writer - Trial :: http://www.docudesk.com
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5. The unemployment rate during the current recession in the United States A) Is comparable to the unemployment rate that prevailed during the Great Depression. B) Is high by historical standards, but not even close to the peak unemployment rates during the Great Depression. C) Is typical for postwar recessions. D) Is unusual in that it mostly affects the financial sector. 6. Classical economists disagree with Keynesian economists because A) classical economists believe that all markets are competitive. B) classical economists believe that prices move downward as often as they move upward. C) Keynesian economists believe that market failures are prevalent and classical economists do not. D) classical theories predict that government policies always move the economy to a Pareto- inferior equilibrium, relative to a free market. 7. Can labor productivity increase while total factor productivity decreases? A) No. Total factor productivity is another name for the level of technology, which is the same as labor productivity. B) No. Total factor productivity is always proportional to labor productivity. C)
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This note was uploaded on 06/09/2011 for the course ECON 320 taught by Professor Azzamonti during the Spring '08 term at University of Texas.

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MT1MC vA - ECO 320L Fall 2010 Professor Beatrix Paal...

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