Econ_199_Win_05_Exam__2 - Introduction to Macroeconomics...

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Introduction to Macroeconomics Allen R. Sanderson Economics 19900 Winter 2005 SECOND HOUR EXAMINATION Name (Please Print): ______________________________________ [44 Points Possible] Part I. Multiple Choice. Circle letter corresponding to your answer. One point each; 23 points total. 1. A change in which of the following would result in a movement along, not a shift in, the SRAS? a. the wage rate b. technology c. the available quantity of capital d. the size and education level of the labor force e. aggregate demand 2. In a “crowding-out” model or theory, what is it that gets crowded out? a. imports b. personal consumption on non-durable goods and services c. government purchases of goods and services d. private investment e. savings 3. The change in consumption expenditures divided by the change in income is called: a. the marginal propensity to consume. b. aggregate demand. c. dissaving. d. the multiplier. e. the wealth effect. 4. With respect to saving, a. the saving supply curve has saving on one axis and consumption on the other one. b. household saving increases when nominal interest rates rise. c. a decrease in current disposable income will shift the saving supply curve to the left. d. an increase in the real interest rate decreases the cost of current consumption, and thus it will also decrease the amount of saving. e. if future disposable income is expected to fall, current saving will fall as well. 5. In the macroeconomic long run, which of the following is not expected to hold? a. The LRAS is vertical. b. Real GDP equals potential GDP. c. The economy is at full employment. d. Unemployment is at its natural rate. e. There is no inflation. 6. According to Parkin, the short-run aggregate supply curve is upward-sloping because: a. a higher price level creates a wealth (or real-balance) effect, thus stimulating spending. b. capital and technology are scarce goods. c. money wages do not immediately change when the price level changes. d. higher taxes force people to work more in order to offset their monetary losses. e. This is a trick question because all aggregate supply curves are vertical; they do not have positive slopes. 1
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7. Firms may pay an efficiency wage in order to: a. increase their levels of employment. b.
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Econ_199_Win_05_Exam__2 - Introduction to Macroeconomics...

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