Econ_1102_Practice_Midterm_2b - Practice Questions for...

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Practice Questions for Midterm 2 1102.29: Principles of Macroeconomics Ceyhun Elgin Difficile est tenere quae acceperis nisi exerceas - It is difficult to retain what you may have learned unless you practice it. Gaius Plinius Caecilius Secundus Question 1 Briefly define what the following terms mean. 1. Barter: 2. Discount Rate: 3. Equation of Exchange: 4. Velocity: 5. Reserve requirement: 6. OMO: 7. Fiscal Policy 8. Structural Budget Deficit 9.On-Budget Deficit Question 2. Suppose that the money supply is $3.2 trillion. The FED decides to increase the money supply by $500 billion. If the required reserve ratio is 0.10, what does the FED need to do to carry out the planned increase? What if the required reserve ratio is 0.15?
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Question 3 Consider the following structure of economy: Consumption: C = 25 + 0.75( Y T ) Investment: I = 5 0.25 i Government spending: G = 10 Taxes: T = 20 Money supply: M S = 80 Money demand: M D = ( Y i ) P , where i
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This note was uploaded on 01/28/2012 for the course ECON 1102 taught by Professor Someguy during the Fall '07 term at Minnesota.

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Econ_1102_Practice_Midterm_2b - Practice Questions for...

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