Econ 104 Study Guide for Midterm

Econ 104 Study Guide for Midterm - Economics 104:...

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Economics 104: Introduction to Macroeconomics Prof. Robert Pollin STUDY GUIDE FOR MIDTERM EXAM 10/18/11 What follows below are the topics that you will need to be familiar with in order to be well- prepared for the midterm. Just one more reminder: The midterm will be held in class next Monday, October 24. You will have the full class period to complete the exam. In preparing for the exam, you should start with the lecture notes and PowerPoint, then work through the readings. Just to be clear: you will not be adequately prepared just by going through the lecture materials, without having kept up with the reading. The exam will consist of a combination of true/false questions, multiple choice questions and short essay questions (requiring about three paragraphs to answer). You will have some choice in deciding which questions to answer. You will also be asked to describe your term paper for the course. Intro on Economic Crisis 1. To what extent might we say that the most recent economic crisis was a unique set of circumstances? To what extent could we say it is part of a larger pattern? Larger pattern could be the housing market and the greed by investors. Unique set of circumstances: 2. What does it mean to “securitize” a mortgage? What, if anything, does mortgage securitization have to do with the crisis? 3. Based on what you have read and heard in class, be prepared to comment on the following quote from the 2001 Economic Report of the President , the last one issued by the Clinton Administration: “Given the massive financial instability of the 1930s, narrowing the range of banks’ activities was arguably important for that day and age. But those rules are not needed today.” Against regulation: allen greenspan said that these are really smart people, the bankers, so let them decide b/c the politicians don’t know what’s p. but if you let them decide, then you must et them fail as well. Allowing for failure is the definition of having a true free market. -The people in the financial markets know what they need, however (for regulation) when they need help, government gets involved when they needed to be bailed out. In order to protect society as a whole, the regulation is a beneficial thing in fact. 2.
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This note was uploaded on 10/19/2011 for the course ECON 104 taught by Professor Dolenc during the Spring '08 term at UMass (Amherst).

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Econ 104 Study Guide for Midterm - Economics 104:...

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