Econ 201 FINAL EXAM

Econ 201 FINAL EXAM - Fall 2006 Econ 201 SAMPLE FINAL EXAM:...

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Fall 2006 Econ 201 SAMPLE FINAL EXAM: This test has exactly the same number of questions as the actual final exam. There are 30 multiple choice questions and 11 short answer questions for a total of 75 points. You can use the formula sheet (on the last page) while you do the sample exam – you will also have the same formula sheet during the actual final exam. Multiple Choice Section (30 points): Answer All Questions 1. Crowding out occurs when a. increased taxes force higher levels of national saving. b. deficit spending by the government forces private investment spending to contract. c. local businesses cannot get government contracts because of the higher bids of large corporations. d. foreign investors are willing to pay higher prices for U.S. bonds than American citizens will pay. Graph 28-1 Use the figure shown for the following question. 2. Refer to Graph 28-1. When the money supply curve shifts from MS 1 to MS 2 , a. The equilibrium price level decreases. b. The opportunity cost of holding money decreases. c. The supply of money has decreased. d. The demand for goods and services will decrease. 3. Suppose that Hassan receives a pay increase. We would expect a. Hassan's demand for normal goods to remain unchanged. b. Hassan's demand for inferior goods to decrease. c. Hassan's demand for luxury goods to decrease. d. Hassan's demand for normal goods to decrease. 4. A monetary contraction by the Fed a. increases interest rates and increases aggregate demand. b. increases interest rates and decreases aggregate demand. c. decreases interest rates and decreases aggregate demand. d. decreases interest rates and increases aggregate demand. 1
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Graph 32-2 For the following question, use the figure shown. 5. Refer to Graph 32-2. Which of the following would cause the aggregate demand curve to shift from AD 1 to AD 2 ? a. Expansionary fiscal policy. b. A positive expenditure multiplier effect. c. Crowding out. d. A monetary expansion. Figure 9-6 6. In Figure 9-6, which segment of the aggregate supply curve has the largest multiplier effect? a. AB b. BC c. CD d. DG 7. Misery-Land is closed economy. The Central Bank of Misery-Land carries out expansionary monetary policy that lowers interest rates in the country. As a result, a. Misery-Land’s currency will appreciate. b. Misery-Land’s currency will depreciate. c. Misery-Land will experience a net capital outflow. d. Misery-Land will not experience any capital outflows. 2
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Figure 1: use this graph to answer questions 8 and 9. 8. Figure 1 above shows the Keynesian cross for the United States. If the economy is currently at point K, which of the following factors could cause it to move to point N? a. Prices in the United States rise relative to prices in other countries. b.
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This note was uploaded on 04/07/2008 for the course ECON 201 taught by Professor Witte during the Spring '08 term at Northwestern.

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Econ 201 FINAL EXAM - Fall 2006 Econ 201 SAMPLE FINAL EXAM:...

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