Econ_199_Win_07_Exam__2 - Introduction to Macroeconomics...

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Introduction to Macroeconomics Allen R. Sanderson Economics 19900 Winter 2007 SECOND HOUR EXAMINATION Name (Please Print): ______________________________________ [40 Points Possible] Part I. Multiple Choice. Circle letter corresponding to your answer. One point each; 13 points total. 1. Which one of the following statements is correct?. a. Keynes was quite pessimistic about capitalistic systems and their long-run future. b. By a “closed economy” we mean one that assumes a balanced budget and no leakages. c. The most recent GDP numbers for 4 th quarter 2006 indicate above average economic growth. d. The Fed controls the prime rate directly and the discount rate indirectly. e. The Index of Leading Indicators tries to give a snapshot of the economy two years out. 2. “Men are disposed to increase their consumption as their incomes increase, but not by as much as the increase in their incomes.” This sentence or statement is about: a. the shape of the AD curve. b. the multiplier. c. leakages. d. the Keynesian consumption function. e. crowding out. 3. The difference between the two national debt figures often stated – at present $8.7 trillion versus. $5.1 trillion – is largely attributable to: a. intra-governmental holdings of some of the bonds. b. misunderstanding what is a flow from what is a stock. c. bonds being held within the United Sates as opposed to abroad. d. borrowing held by households vs. that held by commercial banks and business firms. e. confusion as to what is the principal vs. what is “only” the interest owed. 4. The principle or assertion that an increase in the price level decreases the real value of currency and other nominal assets, which then causes a decrease in consumption, is called: a. the relative price effect. b. the Ricardo-Barro effect. c. the wealth effect. d. the consumption function effect. e. the inflationary effect. 5. The series of induced increases in consumption spending that result from an initial increase in autonomous expenditures are referred to as: a. fiscal policy. b. the consumption function effect. c.
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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_07_Exam__2 - Introduction to Macroeconomics...

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