Midterm I_answers - ECON 202 Macroeconomic Theory Fall 2011...

Info icon This preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
ECON 202 Macroeconomic Theory Fall 2011 MIDTERM I Thursday, 3 November 2011 17:40-19:30 in G110 Please answer the following questions. Write your answers clearly on the midterm. You can achieve a total 100 points. There are 6 short questions followed by two long questions (weighed 70/100). You should read all of the questions first. There is a blank page attached at the end of the midterm to be used as scratch paper. GOOD LUCK! NAME ………………………………………………………. NUMBER …………………………………………………… (This table is for the instructor use only) Total Short Questions Long Questions Total
Image of page 1

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

View Full Document Right Arrow Icon
SHORT QUESTIONS (30 points) Multiple Choices (5 points each) (For partial points write your explanation) 1) Consider a closed economy where T=G, I>0. Then, private saving is: A) Equal to public saving. B) Cannot answer this question with the available information. C) Bigger than public saving. D) Bigger than investment. E) Smaller than public saving. S + (T-G) = I T-G=0 S=I > 0 > (T-G) = 0 2) Which of the following combinations of monetary and fiscal policies is sure to decrease interest rates? A) Increase MS, Increase T B) Increase MS, Decrease T C) Decrease MS, Increase T D) Decrease MS, Decrease T 3) The money multiplier A) May be equal to 1 if and only if people decide not to deposit their money in banks. B) May be equal to 1 if and only if banks put in reserves all the deposits they get. C) May be equal to 1 if and only if people decide to have all their money in currency or banks don’t lend or buy bonds with the deposits they get. D) Must always be greater than 1.
Image of page 2
Money multiplier= 1/c + ɵ (1-c), When c=1 or ɵ =1 the multiplier is equal to 1. Please state whether the following two statements are TRUE or FALSE (there is no uncertain choice) with a short explanation (3 or 4 lines).
Image of page 3

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

View Full Document Right Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern