Econ_199_Win_06_Exam__2 - Introduction to Macroeconomics...

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Allen R. Sanderson Economics 19900 Winter 2006 SECOND HOUR EXAMINATION Name (Please Print): ______________________________________ [41 Points Possible] Part I. Multiple Choice. Circle letter corresponding to your answer. One point each; 20 points total. 1. ___________________________ occurs when real GDP is less than potential GDP. a. Stagflation b. A fiscal wedge c. Job rationing d. Crowding out e. A recessionary gap 2. Efficiency wages: a. are usually set below the equilibrium wage rate for a given skill level. b. lead to workers being indifferent about whether they keep their jobs or are fired. c. may lower recruitment and training costs for a firm. d. decrease unemployment (and the unemployment rate) in an economy. e. increase labor turnover for a firm. 3. The “Classical Dichotomy” is best defined as: a. the extent to which an economy is self-regulating with regard to full employment and a steady price level. b. distinguishing clearly Aggregate Demand from Aggregate Supply issues. c. distinguishing clearly short-run from long-run impacts. d. the separation of real from nominal variables. e. being clear on what is fiscal policy and what belongs more appropriately to the monetary policy side of things. 4. The long-run aggregate supply curve has the shape it does because: a. of the assumption that any change in the price level would be matched by corresponding changes in the prices of resources (or inputs or factors of production). b. most of the time an economy is operating at a below-full-employment level. c. of the wealth and (intertemporal and international) substitution effects. d. money wages are fixed. e. fiscal and/or monetary policies can have substantial impacts on the level of output, employment and prices in an economy in the long run. 5. Which of the following would decrease (that is, shift to the left) current U.S. aggregate demand? a. an increase in government purchases of goods and services b. optimistic consumer and business expectations about the future of the economy c. an increase in economic growth in Asia and Europe d. an increase in the price level e. a decrease in the money supply or an increase in interest rates 6. Which of the following is generally thought to be independent of the price level? a.
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This test prep was uploaded on 04/07/2008 for the course ECON 199 taught by Professor Sanderson during the Fall '07 term at UChicago.

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Econ_199_Win_06_Exam__2 - Introduction to Macroeconomics...

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