Econ+101B+Final+2009+Fall - UNIVRSITY OF CALIFORNIA,...

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UNIVRSITY OF CALIFORNIA, BERKELEY Department of Economics Econ 101B- Macroeconomics Final Exam- Fall 2009 Prof. Hamid Shomali Multiple Choice – 20 questions. Each question has 2.5 points 1. Each of the three models of aggregate supply is based on some market imperfection. In the sticky price model, the imperfection is that: a. Some firms do not adjust their prices instantly to changed in demand. b. Contracts and arrangements may prevent nominal wages from adjusting rapidly to changing economic conditions c. Firms confuse changes in the overall level of prices with changes in relative prices d. The real wage adjusts to bring labor supply and labor demand into equilibrium 2. The Phillips curve depends on all of the following forces except: a. the current exchange rate b. expected inflation c. the deviation of unemployment from its natural rate d. supply shocks 3. The classical dichotomy breaks down for a Phillips curve, which shows the relationship between a nominal variable, -------, and a real variable,-------. a. output; prices b. money; output c. inflation; unemployment d. unemployment; inflation 4. Economists who view the economy as inherently unstable generally argue that: a. stabilization policy is too dangerous to be used b. the economy should be stimulated when it is depressed and slowed when it is overheated c. the economy should be slowed when it is depressed and stimulated when it is overheated d. monetary and fiscal policies should follow rigid rules of constant growth 5. The outside lag is the time: a. before automatic stabilizers respond to economic activity b. when automatic stabilizers are not effective c. between a shock to the economy and the policy action responding to the shock d. between a policy action and its influence on the economy 6. Advocates of passive policy argue that because monetary and fiscal policy lags are: a. short and fixed these policies should not be used to offset shocks b. long and variable these policies should not be used to offset shocks
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This note was uploaded on 10/04/2011 for the course ECON 101b taught by Professor Staff during the Spring '08 term at Berkeley.

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Econ+101B+Final+2009+Fall - UNIVRSITY OF CALIFORNIA,...

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