econ 232-spring 2011-midterm

Econ 232-spring - ECON 232 SPRING 2011 MIDTERM Name Student Number MULTIPLE CHOICE Choose the one alternative that best completes the statement or

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ECON 232 SPRING 2011 MIDTERM Name: Student Number: MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Which of the following calculations will yield the correct measure of real GDP? 1) A) multiply nominal GDP by the GDP deflator. B) divide nominal GDP by the consumer price index. C) divide the GDP deflator by the consumer price index. D) divide nominal GDP by the GDP deflator. E) none of the above 2) Suppose nominal GDP in 2009 does not change (compared its previous level in 2008). Given this information, we know with certainty that: 2) A) real GDP increased during 2009 B) more information is needed to answer this question C) both the GDP deflator and real GDP fell during 2009 D) the GDP deflator increased during 2009 E) consumer price index increased during 2009 3) Let the consumption function be represented by the following equation: C = c 0 + c 1 Y D. For this equation, we assume that c 1 is 3) A) larger than c 0 . B) negative. C) equal to one. D) larger than one. E) none of the above. 4) Which of the following represents total saving for an economy? 4) A) the sum of taxes and government spending. B) the sum of private saving and public saving. C) the sum of private saving and fixed investment. D) the excess of taxes over government spending E) none of the above. 5) Which of the following events will cause a reduction in equilibrium output? 5) A) an increase in taxes. B) an increase in the marginal propensity to save. C) a reduction in the investments. D) all of the above. E) none of the above. 6) If C = 2000 + .9Y D , what increase in government spending must occur for equilibrium output to increase by 1000? 6) A) 100. B) 200. C) 500. D) 1000. E) 10000. 1
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7) When a closed economy is in equilibrium, we know with certainty that: 7) A) I = S B) I = S + (T - G) C) G = T and S = I D) I = S + (G - T) E) both (b) and (c) are correct 8) Based on our understanding of the model presented in Chapter 3, a reduction in investment will cause: (in the short run) 8) A) a reduction in the marginal propensity to save B) an increase in the multiplier C) a reduction in the multiplier D) a reduction in output E) both (a) and (c) 9) Suppose business confidence decreases causing a reduction in investment. Based on our understanding of the model presented in Chapter 3, we know with certainty that a reduction in investment will cause (in the short run): 9) A) an increase in the multiplier B) a reduction in the marginal propensity to save C) a reduction in the multiplier D) a reduction in consumption as the economy adjusts to this decrease in investment
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This note was uploaded on 07/08/2011 for the course ECON 1102 taught by Professor N/a during the Spring '11 term at Dallas.

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Econ 232-spring - ECON 232 SPRING 2011 MIDTERM Name Student Number MULTIPLE CHOICE Choose the one alternative that best completes the statement or

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