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Practice Exam 1- Spring 2012

20 when a person purchases a 90 day treasury bill he

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Unformatted text preview: not make workers poorer because wages increase: A) faster than the overall price level. B) more slowly than the overall price level. C) in proportion to the increase in the overall price level. D) in real terms during periods of inflation. 18. In a small open economy, if the government adopts a policy that lowers imports, then the quantity of exports: A) remains unchanged. B) decreases, but not as much as the quantity of imports decreases. C) decreases by exactly the same amount as the quantity of imports decreases. D) decreases by more than the quantity of imports decreases. 19. All of the following statements about sticky prices are true except: A) in the short run, some wages and prices are sticky. B) the sticky- price model describes the equilibrium toward which the economy slowly gravitates. C) for studying year- to- year fluctuations, most macroeconomists believe that price stickiness is a better assumption than is price flexibility. D) magazine publishers tend to change their newsstand prices only every three or four years. 20. When a person purchases a 90- day Treasury bill, he or she cannot know the: A) ex post real interest rate. B) ex ante real interest rate. C) nominal interest rate. D) expected rate of inflation. 21. If the adult population equals 250 million, of which 145 million are employed and 5 million are unemployed, the labor force participation rate...
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