Final Part II

Final Part II - Dr Happel ECN 111 Macroeconomic Principles...

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Dr. Happel Name ________________________ ECN 111 ID _______________________ Macroeconomic Principles Spring 2006 FINAL EXAM PART II (25 points) 1. (10 points) Write out the equation of exchange and define each symbol in the equation. Next, explain what Milton Friedman had to say about each of these symbols, what he proposes about the growth rate of M 2 , what he proposes about the federal budget, and what he proposes for income taxes. Finally, carefully explain whether you agree or disagree with Friedman on his proposal to legalize drugs in the U.S. 2. (4 points) On the appropriate graphs above, first depict the AD/AS curves for the Keynesian view, next the curves for the Friedman/Monetarist view, then the curves for the rational expectations view, and finally the curves for the supply-side view. Keynes Friedman/ Rational Supply-side GDP Monetarist Expectations Deflator Real GDP Real GDP Real GDP Real GDP
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3. (4 points) Assets Liabilities $2M Building $3M Government Securities $3M Existing Loans
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Final Part II - Dr Happel ECN 111 Macroeconomic Principles...

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