Midterm1_practice - Econ 211 Practice Midterm #1 The exam...

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1 Econ 211 Practice Midterm #1 The exam has a total of 28 questions (100 points). You will have 75 minutes to complete the exam. Good Luck! Print your Name_______________________________ Sign the honor Pledge affirming that you have neither given nor received aid on this exam and have complied with all of the rules of this exam. Signature______________________________________ Turn this sheet and the scantron sheet in with your answers. I. Multiple Choice (50%) Instructions: For questions 1-25, mark the letter for the best answer choice for each question on the computer readable (scantron) answer sheet. Each question in this section is equally weighted. Read each question carefully 1. (2 pts) Macroeconomic models: a. assume all wages and prices are sticky. b. assume all wages and prices are flexible. c. make different assumptions to explain different aspects of the macroeconomy. d. focus primarily on the optimizing behavior of households and firms. 2. (2 pts) A period of falling prices is called: a. deflation. b. inflation. c. a depression. d. a recession. 3. (2 pts) The total income of everyone in the economy adjusted for the level of prices is called: a. a recession. b. an inflation. c. real GDP. d. a business fluctuation. 4. (2 pts) Using a market-clearing model to analyze the demand for haircuts is ______ because the price of a haircut usually changes ______. a. realistic; frequently b. realistic; infrequently c. unrealistic; frequently d. unrealistic; infrequently 5. (2 pts) All of the following statements about sticky prices are true except : a. in the short run, some wages and prices are sticky. b. the sticky-price model describes the equilibrium toward which the economy slowly gravitates. c. for studying year-to-year fluctuations, most macroeconomists believe that price stickiness is a better assumption than is price flexibility. d. magazine publishers tend to change their newsstand prices only every three or four years.
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2 6. (2 pts) In a simple model of supply and demand for pizza, when the price of cheese increases, the price of pizza ______ and the quantity purchased _____ a. increases; increases b. decreases; increases c. decreases; decreases d. increases; decreases 7. (2 pts) The inflation rate is a measure of how fast: a. the total income of the economy is growing. b.
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This note was uploaded on 02/03/2012 for the course ECON 302 taught by Professor Quan during the Spring '11 term at Canadian University College.

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Midterm1_practice - Econ 211 Practice Midterm #1 The exam...

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