Econ102_Exam1_Form4_Winter08_

Econ102_Exam1_Form4_Winter08_ - Winter Semester 2008...

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Winter Semester 2008 Form 4 Economics 102 – Principles of Economics II Department of Economics – University of Michigan Examination No. 1 – Section 100 Circle the correct answer for each of the following questions . 1. Your form number is A) 1 B) 2 C) 3 D) 4 Table 1 2. According to Table 1, if Anne and Sam each worked separately, how many meals per day would be served by each of them? A) 40 B) 4 C) 2 D) 20 3. Suppose the exchange rate in the year 2006 was 1 euro per dollar, and in 2007 the exchange rate increased to 2 euros per dollar. If the price of a German sweater was 50 euros in both years, the new dollar price in 2007 would be _______ and imports of German sweaters would __________. A) $25; increase B) $25; decrease C) $100; increase D) $100; decrease 4. Causation A) occurs when there is no correlation. B) occurs when two variables are correlated. C) means one event brings about another event. D) means one event is observed to occur along with another. (OVER) 1
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Winter Semester 2008 Form 4 5. Which of the following events is most likely to cause the investment share line to shift to the right? A) The release of a government report demonstrating that new computer equipment will lower future business costs B) A decrease in the investment tax credit C) A rise in real interest rates D) An increase in pessimism 6. According to the spending allocation model, which of the following statements is correct ? A) Tax cuts and increases in government purchases have the same effect on the economy. B) Tax cuts cause the real interest rate to fall and increases in government purchases cause the interest rate to rise. C) Tax cuts cause the real interest rate to rise and increases in government purchases cause the interest rate to fall. D) All else held equal, a tax cut has no effect on the nongovernment share of GDP. 7. A decrease in the United States interest rate relative to the Japanese interest rate will cause the exchange rate, measured in yen per dollar, to ___________ as international investors ___________ their demand for dollar-denominated assets. A) rise; increase B) fall; increase C) rise; decrease D) fall; decrease 8. A higher real interest rate today makes current consumption A) more expensive relative to future consumption because the return on savings is lowered. B) more expensive relative to future consumption because the return on savings is increased. C)
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This note was uploaded on 04/04/2008 for the course ECON 102 taught by Professor Rossana during the Winter '08 term at University of Michigan.

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Econ102_Exam1_Form4_Winter08_ - Winter Semester 2008...

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