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203-mt-winter10-v1a

# 203-mt-winter10-v1a - Econ 203 Mid Term Exam Name Winter...

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Econ 203: Mid Term Exam Winter 2010 (version 1) Duration: 60 minutes Name: St. ID: 1) In a short - run macroeconomic equilibrium, real GDP exceeds potential GDP, so if aggregate demand does not change the A) long - run aggregate supply curve will shift leftward as the money wage rate falls. B) short - run aggregate supply curve will shift rightward as the money wage rate falls. C) short - run aggregate supply curve will shift leftward as the money wage rate rises. D) long - run aggregate supply curve will shift leftward as the money wage rate rises. Answer: C 2) If the marginal propensity to consume is 0.8, every \$10 increase in disposable income increases 3) If there are no taxes or imports and MPC = 0.67, the multiplier is 4) The short-run aggregate supply curve is upward sloping because: 5) An example of "investment" in computing real GDP using the expenditure approach is the purchase of A) a new set of tools by an auto mechanic, for use in repairing cars B) a 100 year old house by a married couple C) computer chips by Dell to put in their personal computers D) 100 shares of IBM stock Answer: A 6) When a student finishes college and begins looking for work, 7) If labour force in Utopia grows by 7 per cent and employment grows by 5 percent unemployment rate will: 1

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8) For a household, the marginal propensity to save plus the marginal propensity to consume 9) If a \$200 billion increase in investment spending creates \$200 billion of new income in the first round of the multiplier process and \$100 billion in the second round, the multiplier in the economy is: A) 2 B) 2.5 C) 5 D) 1.33 Answer: A
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203-mt-winter10-v1a - Econ 203 Mid Term Exam Name Winter...

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