ECON 100B - Summer 2005 - Wood - Midterm 2

# ECON 100B - Summer 2005 - Wood - Midterm 2 - Name(Last name...

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Summer 2005 (IS-LM Model) 1 Name: ____________________ (Last name, first name) SID: ____________________ Lecture (1 or 2): ____________________ UGBA 101B Macroeconomic Analysis for Business Decisions Dr. Steven Wood Summer 2005 Exam #2 Please sign the following oath: The answers on this test are entirely my own work. I neither gave nor received any aid while taking this test. I will not discuss the questions on this test until after 7:30 p.m. on June 21, 2005. ______________________ Signature Any test turned in without a signature indicating that you have taken this oath will be assigned a grade of zero. Graph Instructions When drawing diagrams, the following rules apply: a. Completely, clearly and accurately label all axis, lines, curves, and equilibrium points. b. The original diagram and equilibrium points must be drawn in black. c. The first shift of any line(s) and the new equilibrium points must be drawn in red. d. Any subsequent shifts in curves and new equilibrium points must be drawn in another color, preferably blue and then green. Do NOT open this test until instructed to do so.

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Summer 2005 (IS-LM Model) 2 A. Multiple Choice Questions . Circle the letter corresponding to the best answer. (30 points.) 1. Suppose that the economy becomes less sensitive to falling interest rates when interest rates are already low. Then we can best represent this as: a. A fall in the money multiplier. b. The LM curve not shifting out as far as it ordinarily would. c. The IS curve becoming steeper at low interest rates. d. A fall in the interest elasticity of money. 2. Crowding out is not an issue in the US because: a. Fiscal policy is rarely used due to inside lags. b.
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ECON 100B - Summer 2005 - Wood - Midterm 2 - Name(Last name...

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