Midterm_2 - Midterm II 75 minutes Econ 1102.30: Principles...

Info iconThis preview shows pages 1–5. Sign up to view the full content.

View Full Document Right Arrow Icon
Midterm II 75 minutes Econ 1102.30: Principles of Macroeconomics Justin Barnette November 14, 2007 Name: _______________________________________________ On the following pages, please show all of your work. If you need more space, use the back of the page. Clearly state the location of your work/answers. Clearly highlight/circle solutions. Fully label all graphs. Read each question carefully and be sure to answer all parts of every question. When in doubt, write the formula for the solution. The formula alone is worth half the points for each part of the question. There should be 10 pages including this cover sheet. 1
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Question 1 (20 points) Match the following terms with the correct definition number from the last page of the exam. (You can go ahead and tear off the last page of the exam.) Asset Money Barter Moral Hazard Budget Deficit National Debt Central Bank Net Worth Crowding Out Open-Market Operations Fiscal Policy Phillips Curve Indexing Rational Expectations Liquidity Run on a Bank M1 Structural Budget Deficit Monetary Policy Velocity 2
Background image of page 2
Question 2 (4 points) Consider the hypothetical country Sunland. Suppose that the government expenditures in Sunland are fixed at 1000. The taxes are of the form T=200+0.25Y and transfers are such that TR=500. a) Given that the level of GDP is 8000, what can you say about the government’s budget? Does it have a surplus, deficit? b) What is the magnitude of the surplus or deficit? Question 3 (6 points) Suppose you have the following initial information for an economy. Assume that the deficit grows at 3% per year. Complete the following: Year Real GDP Debt ($s) Deficit ($s) 2004 100 50 25 2005 102 2006 104 2007 106 Question 4 (12 points) 3
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Suppose that the following information describes an economy: C=200+0.6DI T=400+0.25Y
Background image of page 4
Image of page 5
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 10

Midterm_2 - Midterm II 75 minutes Econ 1102.30: Principles...

This preview shows document pages 1 - 5. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online