exam07sF - AGEC 217 Prof DeBoer FINAL EXAM May 4 2007 This...

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1 AGEC 217 Prof. DeBoer FINAL EXAM May 4, 2007 This final exam is worth 300 points, with 60 multiple choice questions worth 5 points each. There is one 5 point bonus question. You may take the question sheet with you when you’re done . Answers will be posted on WebCT Practice Exams and Answers after the exam. 1. The Bretton Woods system of fixed exchange rates collapsed when a. President Dwight Eisenhower refused to support an IMF loan to France in 1958. b. President John Kennedy reduced U.S. interest rates in 1963. c. President Richard Nixon closed the gold window in 1971. d. President Gerald Ford began the Whip Inflation Now program in 1974. 2. The Federal Reserve increased the money supply rapidly during World War II, in order to a. reduce interest rates to discourage investment in consumer-related industries. b. hold interest rates constant in the face of big increases in money demand. c. increase interest rates to encourage investment in war-related industries. d. hold interest rates constant in the face of big decreases in money demand. 3. The Johnson administration’s “guns and butter” policy refers to a. new tariffs designed to protect industries such as munitions manufacturing and dairy farming. b. an anti-poverty program where national guard troops delivered food to the inner city. c. simultaneous increases in government spending on social programs and the Vietnam War. d. a program to control handguns and reduce farm surpluses, by offering to trade government butter and cheese to gun owners in exchange for their guns. 4. In the 1970’s, the Nixon and Ford administrations adopted “incomes policies,” which tried to a. bring down inflation while avoiding recession by reducing inflationary expectations. b. reduce income inequality by raising tax rates on the rich. c. prevent recession by increasing transfer payments to low and middle income consumers. d. reduce interest rates by encouraging direct deposit of wages and salaries into banks.
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2 5. Crowding out is defined as a. when lower cost or higher quality imports reduce employment in domestic industries. b. when government spending and borrowing reduce spending in other sectors of the economy. c. when values increase in the stock market, which pulls money out of the bond market. d. what happens when the elevator is full, the door opens, and President Jischke is waiting to get on. 6. The first President Bush said of Federal Reserve chair Alan Greenspan, “I reappointed him and he disappointed me.” President Bush thought a. that Greenspan’s Fed cut interest rates too fast during the 1992 election, making lenders angry. b. that Greenspan’s Fed supported a high value of the dollar too long, leading to a recession in 1992. c.
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exam07sF - AGEC 217 Prof DeBoer FINAL EXAM May 4 2007 This...

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