midterm2_fall06

midterm2_fall06 - 1.Net taxes are a) the difference between...

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1.Net taxes are a) the difference between taxes paid to the government and government spending *b) taxes paid to government minus transfer payments c) the difference between the amount of taxes owed and the amount collected d) none of the above 2.Which of the following pairs would BOTH shift the AD curve in the US to the right? a) increase in the value of dollar, increase in European GDP b) decrease in the value of dollar, decrease in European GDP c) increase in the value of dollar, decrease in European GDP *d) decrease in the value of dollar, increase in European GDP 3.At potential GDP a) there is unemployment, but there is not full employment b) there is no unemployment, but there is full employment c) inflation is always zero *d) unemployment is at its natural rate e) c and d are correct 4.Which of the following is not included in G N P? a) the purchase of GM stock by Microsoft b) the purchase of an Intel chip by Dell c) the construction of a new Microsoft R&D site in Beijing using 20% American engineers *d) a & b e) a & b & c 5. Household savings equal a) G + X + I – T – M b) T – G – X + M + I c) X – I – M – G + T d) M + I + G – X – T 6. The US nominal interest is 6% and expected US inflation is 3%, and the world real interest rate is 2%. This will lead Americans to a) lend more to the rest of the world b) borrow more from the rest of the world c) buy more American government bonds than foreign government bonds d) a & c *e) b & c 7. In years with positive growth and deflation real GDP increases nominal GDP. *a) faster than b) slower than c) at the same pace as d) sometimes faster, sometimes slower, and sometimes at the same pace as
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8. If the nominal interest rate is 7.163%, and inflation is 3.036%, the real interest rate is and the nominal interest paid on a loan of $32654 is . a) 10.199%, $2339 b) 10.199%, $3330 c) 10.199%, $991 d) 10.199%, $1348 *e) none of the above 9. Which of the following factors implies that official statistics may understate the unemployment rate? a) the problem of measuring overtime work b) the fact that some part-time workers want to work full-time c) a & b *d) none of the above 10. Which of the following people are eligible for unemployment benefits? a) a college senior looking for her first job
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midterm2_fall06 - 1.Net taxes are a) the difference between...

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