Fall-2011 –November 3, 2011

Fall-2011 –November 3, 2011 - Econ 1120...

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Econ 1120 – INTRO MACRO – Fall-2011 –November 3, 2011 REGULAR PRELIM #2 (Thursday) PRINT YOUR NAME: ____________________________________ Your C.U. Netid: _____________ YOUR C.U. STUDENT NUMBER: ____________________________ Check YOUR TA’s NAME : _____________TA = Minwook Kang (Tuesday sections) _____________TA = Mirinda Lee Martin (Wednesday sections) _____________TA = Lingwen Zheng (Thursday sections) _____________TA = Yu Zhang (Friday sections) INSTRUCTIONS: There are two sections in this exam Part I: 15 multiple choice questions @ 3 points each Part II: 2 short answer questions (17 points) + 2 Newspaper Article questions (19 points for each) ANSWER ALL QUESTIONS. TOTAL POINTS = 100. TOTAL TIME = 90 minutes. Prelim2 score weights 27.5% of final grade. AGAIN, please…. 1
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PRINT YOUR NAME: ____________________________________ Your C.U. Netid: _____________ YOUR C.U. STUDENT NUMBER: ____________________________ _____________TA = Minwook Kang (Tuesday sections) _____________TA = Mirinda Lee Martin (Wednesday sections) _____________TA = Lingwen Zheng (Thursday sections) _____________TA = Yu Zhang (Friday sections) GRADING ---------------------------------------------------------------------------------------------------------- ____/ 45 (mc)____/ 9 (short essay 1) ____/ 8 (short essay 1)____/ 19 (long essay 1)____/1 9 (long essay 2) TOTAL: ___________/100 -------------------------------------------------------------------------------------------------------------------------- Part I: Multiple Choice. 1 . Read the following scenario and answer the following 3 questions : In July 2011 data collected about the second quarter of 2011 indicates that the economy is in a recession. The Fed’s economists reach a consensus in October 2011 as to what the best course of action to restore full employment would be. The corrective policy is implemented at the end of October 2011. The economy only registers the full impact of the policy in May 2012. 1. The time period between July 2011 and October 2011 is defined as ______ and the time period between October 2011 and May 2012 is defined as ______. a) response lag; implementation lag b) implementation lag; response lag c) recognition lag; response lag d) recognition lag; implementation lag 2. Which of the following policies could the Fed’s economists recommend? I. FOMC (Federal Open Market Committee) should buy back securities II. The Fed should decrease the supply of the US Dollar III. The discount rate should be decreased IV. The treasury should increase taxes a) I, II and IV b) I, II and III c) I and III d) I only. 3. Assume that the economists in the Fed are amazing and that they implement monetary policy that is just enough to offset the recessionary gap of July 2011 and move the economy to full employment, though the 2
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full effect isn’t felt until May 2012. Assume also that in March 2012 there is an unexpected drop in oil prices which lowers input prices. In this event, policy implemented by the Fed will result in an equilibrium
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Fall-2011 –November 3, 2011 - Econ 1120...

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