MT2_2011A_VB - Principles of Macroeconomics MID-TERM#2 SUMMER-A 2011 VERSION B DO NOT OPEN THE TEST UNTIL TOLD TO DO SO READ THE FOLLOWING INSTRUCTIONS

MT2_2011A_VB - Principles of Macroeconomics MID-TERM#2...

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Principles of Macroeconomics MID-TERM #2 SUMMER-A 2011 VERSION B DO NOT OPEN THE TEST UNTIL TOLD TO DO SO. READ THE FOLLOWING INSTRUCTIONS: 1. This test is copied on both sides of the paper. You should have 40 multiple choice questions. There are no blank pages in this exam. 2. Each question is worth one point. 3. Be sure to properly complete your answer sheet. This includes filling in all the bubbles for your name, UF ID, and test version. Grades which must be entered manually due to an incorrectly completed answer sheet will be penalized five percentage points. You may fill-in your name, UF ID and test version while waiting to start the exam. Be sure to fill-in the correct choice on your answer sheet while taking the exam. What is marked on the answer sheet is final. 4. This test is closed book/closed notes. You may use a non-programmable calculator during the exam. Programmable devices are strictly forbidden. 5. When you are finished, turn in only the answer sheet. You may take the test with you. 6. You have one hour and thirty minutes to complete the exam. Good Luck!
1. Consumption spending is $4.5 billion, gross private domestic investment is $3 billion, and government expenditures are $2 billion. If GDP is $14 billion, which of the following could be true regarding exports and imports in the economy? 2. Emily is a writer. She buys pens and paper for $20 and writes a 500-page novel that she sells to a publishing company for $500,000. If the publisher prints 1 million copies that sell for $25 each, what is the contribution to GDP of Emily's novel? 3. The measure of production that values output using base year prices is called: Table 1. 20042005 Nominal GDP$10,000$12,000 Real GDP$9,500$10,500 4. Use Table 1 to answer this question. Given the information above, what can we say has happened in the economy from 2004 and 2005? A) The price level has fallen. B) The price level has risen. C) The price level has remained constant. D) Not enough information is available to determine what has happened to prices. 5. If prices are rising on average, then

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