Exam II Pink - Econ 252 Exam 2 Pink Name(Please PRINT Last...

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t 3 t 2 Log GDP Log RGDP Time Log GDP Log RGDP t 0 t 1 Figure 1 Econ 252 Exam 2 Pink October 10, 2007 Name ( Please PRINT ): Last Name First Name Student ID #: Place a checkmark next to your section number then record the 4-digit section number on the scantron. 0101 Monday/Wednesday/Frida y 11:30 – 12:20 p.m. 0201 Monday/Wednesday/Frida y 12:30 p.m. – 1:20 p.m. No graphing calculators are allowed. No brimmed hats are allowed. If you are wearing a hat with a brim, turn the brim to the back. All cell phones are to be turned off and put away. You will be in danger of receiving a zero on the exam if your cell phone is on or not put away Do not begin the exam until the instructor tells you to. While waiting, fill out your scantron completely and accurately and read the remaining instructions on this page. If any suspicious behavior is noted, you will be moved and may also receive a zero on the exam. Cheating will not be tolerated. Midterm 2 contains 33 questions on 5 pages. Please be sure that you have 5 pages in your test booklet. If not, please inform the instructor before you begin the exam. Please mark all answers on BOTH the test booklet and the scantron. Once you are finished, please take both your test booklet AND answer sheet to the proper station. 1. An Italian company operates a pasta restaurant in the U.S. The profits from this pasta restaurant are included in a) U.S. GDP and Italian GNP. c) U.S. GNP and Italian GNP. b) U.S. GDP and Italian GDP. d) U.S. GNP and Italian GDP. 2. Suppose GDP consists of wheat and rice. In 2005, 20 bushels of wheat are sold at $4 per bushel, and 10 bushels of rice are sold at $2 per bushel. In 2004, the price of wheat was $2 per bushel and the Econ 252 Page 1 of 5 Midterm 2 Pink
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price of rice was $1 per bushel. Using 2004 as the base year, it follows that, for 2005, nominal GDP is __________, real GDP is ___________, and the GDP deflator is _________. 3. If we denote the real interest rate as r, the nominal interest rate as i, and the expected rate of inflation as π e , the “Fisher Effect” can be expressed as:
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