ECON 252 Final - Maymester 2010

ECON 252 Final - Maymester 2010 - ECON252-002 Final- Blue...

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ECON252-002 Final- Blue Version Name: Student ID: (Confirm you have the blue scantron. You have 2 hours. Good luck~! ) 1. Jenna is searching for a job that suits her tastes about where to live and coworkers. Mary is looking for a job that makes best use of her skills. A) Jenna and Mary are both frictionally unemployed. B) Jenna and Mary are both structurally unemployed. C) Jenna is frictionally unemployed, and Mary is structurally unemployed. D) Jenna is structurally unemployed, and Mary is frictionally unemployed. Figure 1 . AD AD AD 3 2 1 Y P 2. Refer to Figure 1 . Suppose the multiplier is 3 and the government increases its purchases by $25 billion. Also, suppose the AD curve would shift from AD 1 to AD 2 if there were no crowding out; the AD curve actually shifts from AD 1 to AD 3 with crowding out. Finally, assume the horizontal distance between the curves AD 1 and AD 3 is $30 billion. The extent of crowding out, for any particular level of the price level, is A) $25 billion. B) $30 billion. C) $45 billion. D) $60 billion. 3. According to purchasing power parity, if it took 1,000 Korean Won to buy a dollar this year, but it took 1,100 to buy it last year, then the dollar has A) appreciated, indicating inflation was higher in the U.S. than in Korea. B) appreciated indicating inflation was lower in the U.S. than in Korea. C) depreciated indicating inflation was higher in the U.S. than in Korea. D) depreciated indicating inflation was lower in the U.S. than in Korea.
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Figure 2. 4. Refer to Figure 2. Which of the following sequences (numbered arrows) shows the logic of the interest-rate effect? A) 1, 2, 3, 4 B) 1, 4, 3, 2 C) 3, 4, 2, 1 D) 3, 2, 1, 4 5. Which of the following is not a reason economies always experience some unemployment? A) job search B) unions C) scarcity of resources D) efficiency wages Table 1. Bank of Kopeka Assets Liabilities Reserves $2,000 Deposits $20,000 Loans 18,000 6. Refer to Table 1 . Assume there is a reserve requirement and the Bank of Kopeka is exactly in compliance with that requirement. Assume the same is true for all other banks. Lastly, assume people hold only deposits and no currency. What is the money multiplier? A) 5 B) 10 C) 15 D) 20 7. Refer to Table 1 . Assume the Fed’s reserve requirement is 9 percent and all banks besides the Bank of Kopeka are exactly in compliance with the 9 percent requirement. Further assume that people hold only deposits and no currency. Starting from the situation as depicted by the T-account, if the Bank of Kopeka decides to make new loans so as to end up with no excess reserves, then by how much does the money supply eventually increase? A) $555.00. B) $1,200.00. C) $1,777.78. D) $2,222.22.
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8. If the Federal Open Market Committee decides to increase the money supply, then the Federal Reserve A) creates dollars and uses them to purchase government bonds from the public. B)
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This note was uploaded on 12/06/2011 for the course ECON 252 taught by Professor Robertholand during the Fall '08 term at Purdue University.

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ECON 252 Final - Maymester 2010 - ECON252-002 Final- Blue...

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