Econ_199_Win_05_Exam_4 - Introduction to Macroeconomics...

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Introduction to Macroeconomics Allen R. Sanderson Economics 19900 Winter 2005 FOURTH HOUR (AKA FINAL) EXAMINATION Name (Please Print): ______________________________________ [44 Points Possible] Part I. Multiple Choice. Circle letter corresponding to your answer. One point each; 23 points total. 1. Feedback-rule policies would be most attractive to: a. rational expectationists. b. Keynesians. c. monetarists. d. real business cycle theorists. e. new classical economists. 2. Controlling inflation by having the Fed adjust the federal funds rate is a policy referred to as: a. the Friedman rule. b. the Lucas rule. c. the Romer rule. d. the Solow rule. e. the Taylor rule. 3. According to Keynes, an economy can get stuck in a recession and not self-correct within an acceptable time frame because: a. the price level will continue to fall. b. of ineffective fiscal policy. c. exports and imports may dry up. d. of stagnant productivity. e. of downward sticky wages. 4. Which of the following is not an aggregate demand theory of the business cycle? a. Keynesian b. monetarist c. rational expectations d. real business cycle e. new classical 5. Over the last 80-100 years in the United States, the ratio of the average length of a business cycle expansion to the average length of a recession would be: a. 1 to 4. b. 1 to 2. c. 1 to 1. d. 2 to 1. e. 4 to 1. 6. Which of the following actions probably contributed to the severity and duration of the Great Depression? a. large budget deficits incurred by the Hoover administration, which engaged in Reagan- and Bush-style tax cuts b. the sudden elimination of trade barriers, which exposed our manufacturers to too much foreign competition c. greed on the part of businesses and banks (which attempted to profit by others’ misfortunes) d. sharp contractions in the money supply – and perverse monetary policy in general e. shifting to a silver exchange standard instead of having our currency backed by gold 1
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7. According to Parkin, cost-push inflation is the direct result of: a. increased government spending or sizable tax cuts. b. higher nominal wage rates and the cost of raw materials. c. excessive monetary growth. d. decreases in investment and a slowdown in the rate of technological change and productivity. e.
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Econ_199_Win_05_Exam_4 - Introduction to Macroeconomics...

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