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Midterm Sample Questions

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35 views

Midterm Sample Questions

Uploaded by

emma marx
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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Sample Questions

1) If C = $250, I = $50, G = $60, NX =- $20, how much is GDP?


A) $365
B) $335
C) $340
D) $345

2) Saving is a ________ variable, and wealth is a ________ variable.


A) stock; flow
B) stock; stock
C) flow; flow
D) flow; stock

3) The nominal interest rate minus the inflation rate is the


A) depreciation rate.
B) real interest rate.
C) discount rate.
D) forward rate.

4) With no inflation and a nominal interest rate 3 percent, a person can trade off one unit of
current consumption for ________ units of future consumption.
A) 0.97
B) 1.03
C) .03
D) -.03

5) According to Life Cycle Income hypothesis, if X’s income will increase by 5% tomorrow
and will stay at that level for his remaining life, he should:
A) Increase consumption from tomorrow for his remaining life
B) Increase consumption only today
C) Decrease consumption today, increase from tomorrow for his remaining life
D) Increase consumption from today for his remaining life

6) RBI exhibits immediate and maximum control over:


A) M1
B) m
C) BASE
D) M1, m and BASE equally

Answers:
1) C 2) D 3) B 4) B 5) D 6) C

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