Econ%20252%20PINK%20Final%20-%20Fall%202009

Econ%20252%20PINK%20Final%20-%20Fall%202009 - 1 The deep...

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1. The deep recession the United States experienced from 1979 to 1982 was caused by: a) increases in income tax rates. b) a real depreciation of the dollar in international currency markets. c) a tight money policy adopted by the FED d) All of the above. 2. If the required reserve ratio for deposits is 2 percent an open market sale of $1,000,000 worth of securities by the FED will, ceteris paribus, ____ the supply of money and credit by _____. 3. In the short run , following an increase in government spending, interest rates will ______ and investment will _______. 4. In the short run , following an increase in government spending, the real exchange rate will _____ and net exports will _____. 5. In the short run , following an increase in government spending, labor employment will _____ and aggregate real income will ____. a) rise; rise d) fall; fall b) fall; rise e) remain unchanged; remain unchanged c) rise; fall 6. In the short run , following an open market purchase of securities by the Fed, interest rates will ______ and investment will _______. 7. In the short run , following an open market purchase of securities by the Fed, the real exchange rate will _____ and net exports will _____. 8. In the short run , following an open market purchase of securities by the Fed, labor employment will _____ and aggregate real income will ____. 9. If real GDP is growing at a higher rate than nominal GDP the economy is experiencing ______. a) recession b) deflation c) inflation d) a boom and inflation Econ 252 PINK Final 1 of 5 Fall 2009
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10. “Substitution bias” in measurement of the ________ is argued by many economists to cause this index to ______ the impact of rising prices on households.
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