Exam I Fall 2007

Exam I Fall 2007 - ECO 101 EXAM I NAME (print): _ Some...

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ECO 101 NAME (print): _______________________ EXAM I Some general recommendations. One, please read all answer choices before selecting your answer. Two, when answering supply/demand questions assume that both, the law of demand and the law of supply hold, unless otherwise stated. Three, remember that when answering a question you should operate under the Ceteris Paribus assumption (all else held constant). For the following five questions below please state whether the change will cause the US dollar appreciation (A), depreciation (B), or leave the dollar unaffected (C). Assume that all else is held constant 1) This month the FED lowered the interest rate in the US, such a change is expected to cause the dollar to …. 2) The new president of France urges the European Central Bank to lower the interest rate in the Euro Zone (the 13 countries that use the Euro as its currency). If the European Central Bank (ECB) follows the request of the French president and decreases the interest rate, that would cause the US dollar to …… against the Euro. 3) If the US imports post substantial rise then the US dollar will? 4) The Outlet Mall’s parking lot is flooded with cars from Ontario. If as a result of that the US exports increase substantially, then the USD will be expected to . .. 5) If, in light of the increased uncertainty about the future direction of the US financial markets, more and more Americans start to invest into mutual funds that specialize entirely in foreign investment (Americans start investing more overseas). This investment trend is expected to cause the US dollar to …. 6) Modern economics is probably best defined as? a) a business discipline that studies financial markets b) a natural science c) a social science d) a philosophy 7) Which of the following is not considered a resource in economics? a)
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Exam I Fall 2007 - ECO 101 EXAM I NAME (print): _ Some...

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