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Unformatted text preview: Review for final challenge Eco 212 2011 As usual, the format of the challenge is 5-6 short answer questions (1-2 sentences) and 2-3 longer questions (usually requiring a graph, some math, and/or a longer explanation). The challenge is closed book. All questions come from the class notes. Also study homework 3, chapters 23-26, and this review sheet. Remember, you must understand the reasoning behind the relationship between AD , interest rates, C , I , and X- M and the spending balance graph. The schedule has the final challenge on Friday, June 24, at the usual class time. Short answer questions (1-2 sentences) Question 1 Define “neutrality of money.” Explain why money is likely to be neutral in the long run. Question 2 Suppose the US economy experiences a short run recession followed by long run lower infla- tion. According to the model developed in class, which of the following events could have caused this situation? Explain ....
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This note was uploaded on 01/08/2012 for the course ECO 212 taught by Professor Lorca,m during the Summer '08 term at University of Miami.
- Summer '08