macro2

macro2 - EC102.B1 Midterm 2 Version # 01 * Mark on your...

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EC102.B1 Midterm 2 Version # 01 1 * Mark on your scantron the letter of the choice that best answers the question. Please fill in your ID and NAME information on the scantron (be sure to write this information in the boxes AND fill in the bubbles. * Please fill in your ID, NAME, and your TA’s name information on the first page of this test. * Be sure to mark the VERSION of the exam listed in the upper right-hand portion of the first page. * Please write the Name of your TA and the day, time, and section number of your discussion on the top left -hand corner of your scantron. This cannot be bubbled in. * There are 30 questions on the exam and 1 bonus question. Each correct answer is worth 2/3 of a point. The maximum number of points is 20. There are 7 pages on the exam, plus one page of scratch paper. * IMPORTANT: Please return the test when submitting your scantron. Student’s name _________________ Student’s ID #_________________ TA’s name _________________ ____ 1. If the findings of the Boskin Commission are correct, when the measured CPI increases by 10% and household nominal incomes increase by 10% , we should conclude that the real incomes of households: a. stayed constant. b. increased at a higher rate than measured CPI inflation (i.e. by more than 10%) c. increased. d. increased at the same rate as measured CPI inflation (i.e. by 10%) e. decreased. ____ 2. The real rate of interest ( r ) on holding cash in your pocket for one year is _______. [Hint: use the Fisher equation to investigate this problem] a. equal to negative of the rate of inflation ( - ?? ). b. equal to negative of the nominal interest rate ( - i ). c. equal to the nominal interest rate ( i ). d. equal to the rate of inflation ( ? ). e. always equal to zero. ____ 3. Suppose that the total expenditures for the CPI basket in 2000 was $20 per month, while the cost for the same items in 2005 was $30 . If 2000 is the base year, the family's cost of living in 2005, as compared to 2000: a. decreased by 50 percent. b. increased by 50 percent. c. increased by 25 percent. d. increased by 100 percent. e. None of the above ____ 4. Which of the following would NOT affect the Investment component of GDP (i.e. I ): a. A family pays for the construction of their new home. b. A firm increases its stock of unsold output. c. A firm increases its stock of unprocessed intermediate goods. d. A firm purchases a new office building for its accountants. e. None of the above.
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EC102.B1 Midterm 2 Version # 01 2 ____ 5. Ceteris paribus , if the price in US Dollars of American computers exported to France increases , ___________ . [Assume that the U.S. domestic price for these computers remains constant] a. both the U.S. GDP Deflator and the U.S. CPI will increase b. the U.S. GDP Deflator will increase, but the U.S. CPI will decrease c. the U.S. GDP Deflator will increase, but U.S. CPI will remain constant d. neither the U.S. GDP Deflator nor the U.S. CPI will change e. the U.S. GDP Deflator will stay the same and the U.S. CPI will increase
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This note was uploaded on 04/07/2008 for the course EC EC102 taught by Professor Soffritti during the Spring '08 term at BU.

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macro2 - EC102.B1 Midterm 2 Version # 01 * Mark on your...

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