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Econ 311 Midterm1_solutions

Econ 311 Midterm1_solutions - Intermediate Macroeconomics...

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Intermediate Macroeconomics 311 (Professor Gordon) First Mid-Term Examination Fall, 2007 YOUR NAME: Circle the TA session you are attending: Costel Friday 9AM Costel Friday 3PM Jerry Friday 9AM Jerry Friday 3PM INSTRUCTIONS: 1. The exam lasts 1 hour. 2. The exam is worth 60 points in total: 30 points for the three analytical questions, and 30 points for the multiple choice questions. 3. Write your answers to Part A (the multiple choice section) in the blanks on page 1. You won’t get credit for circled answers in the multiple choice section. 4. Place all of your answers for part B in the space provided. 5. You must show your work for part B questions. There is no need to explain your answers for the multiple choice questions. 6. Good Luck! PART A Answer multiple choice questions in the space provided below. USE CAPITAL LETTERS. 1. _ _B __ 6. __D_ _ 11. __B__ 16. _ _A __ 21. _ _D __ 26. _ _B __ 2. _ _D __ 7. __A_ _ 12. _ _B _ 17. _ _B __ 22. _ _E _ 27. _ D _ 3. __B_ _ 8. _ _A __ 13. __D__ 18. _ _B __ 23. _ _E __ 28. _ _E _ 4. __A_ _ 9. _ _E_ _ 14. _ D _ _ 19. _ _B __ 24. _ _C __ 29. _ _D __ 5. _ _E __ 10. _ _E __ 15. _ _C __ 20. _ _A __ 25. _ _D __ 30. _ _C _ 1
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1) The output gap is zero when (a) Actual real GDP > Natural real GDP (b) Actual real GDP = Natural real GDP (c) Actual real GDP < Natural real GDP (d) Natural real GDP = 0. 2) Total expenditures on final product are (a) C + I + G + IM. (b) C + S + T + EX. (c) C + I + S + EX. (d) C + I + G + EX – IM. 3) The leakage and injections approach implies that the government surplus is equal to 4) In national income accounting, (S + T) is 5) Suppose that in our economy: G = 1100, T = 900, S = 140, and NX = –90. How much of our final product is used for investment? 6) A change in nominal GDP sums up changes in (a) prices alone. (b) physical production alone. (c) physical production and hours of production time. (d) physical production and prices. 7) In the consumption function, when disposable income is zero, consumption is 2
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8) Which element of total planned expenditure is not included in “autonomous planned spending?” 9) The multiplier is defined as the ratio of a change in income to the
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