Econ_252_Exam_II_-_Pink_-_Spring_2010

Econ_252_Exam_II_-_Pink_-_Spring_2010 - 1. In an open...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
1. In an open economy, gross domestic product equals $1,850 billion, consumption expenditure equals $975 billion, government expenditure equals $225 billion, investment equals $500 billion, and net exports equals $150 billion. What is national savings? a) $0 b) $500 billion c) $650 billion d) $975 billion 2. You are staying in London over the summer and you have a number of dollars with you. If the dollar depreciates relative to the British pound, then other things the same, a) the dollar would buy more pounds. The depreciation would discourage you from buying as many British goods and services. b) the dollar would buy more pounds. The depreciation would encourage you to buy more British goods and services. c) the dollar would buy fewer pounds. The depreciation would discourage you from buying as many British goods and services. d) the dollar would buy fewer pounds. The depreciation would encourage you to buy more British goods and services. 3. Suppose real income/output equals 1,000, the price level equals 50, and the money supply equals 10,000. From the quantity theory of money we can determine that the velocity of money equals: a) 5 b) 10 c) 15 d) 20 4. Suppose that foreign citizens decide to purchase more U.S. pharmaceuticals and U.S. citizens decide to buy more stock in foreign corporations. Other things the same, these actions a) raise both U.S. net exports and U.S. net capital outflows. b) raise U.S. net exports and lower U.S. net capital outflows. c) lower both U.S. net exports and U.S. net capital outflows. d) lower U.S. net exports and raise U.S. net capital outflows. 5. In an open economy: a) S = I + NCO c) Y = C + I + G b) S + T – G = NX d) None of the above are correct. 6. An open market purchase of securities by the FED will ______ reserves and excess reserves in our banking system. We would expect the federal funds rate of interest to _____ immediately after this purchase. a) increase; rise b) increase; fall c) decrease; fall d) decrease; rise 7. Following an open market purchase of securities by the FED we would expect loans and deposits in the banking system to _____ and the money supply to ______. a) rise; rise b) rise; fall c) fall; rise d) fall; fall 8. The prevailing interest rate is 6% per year. Which one of the following payoffs has the highest present value? a) $3000 received today c) $3200 received one year from now b) $3300 received two years from now d) $3500 received three years from now Exam II – Pink Version Page 1 of 5 Spring 2010
Background image of page 1

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

View Full DocumentRight Arrow Icon
9. AT&T is considering buying new equipment to build a factory. If the interest rate rises, the present value of future profits due to the new factory will ____, and AT&T will be ____likely to build the factory. a)
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 03/03/2012 for the course ECON 252 taught by Professor Robertholand during the Spring '08 term at Purdue.

Page1 / 5

Econ_252_Exam_II_-_Pink_-_Spring_2010 - 1. In an open...

This preview shows document pages 1 - 3. Sign up to view the full document.

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