ECON 1120 Midterm: Econ 1120_2011fall_prelim1_regular_withanswerkey
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Econ 1120 intro macro fall-2011 october 6, 2011. Write down your answers of multiple choice in book1 short essay 1 and 2 in book2 short essay 3 in book3 long essay 1 in book4 long essay 2 in book5: answer all questions. Total time = 90 minutes: prelim 1 counts for 27. 5% of the final grade. Part i: multiple choice: suppose pizza and soda are complements. In an expansion, government spending increases as inflation increases. Suppose further that investment spending (i) is fixed at 100, and government expenditure (g) is fixed at 250. 4: suppose the required reserve ratio, rrr, is 20% and that all banks hold zero in excess reserves. Assume that once money enters the banking system it stays in the banking system. Suppose the federal reserve decides to do an open market operation and buys. billion of treasury bonds from the students in econ 1120. Reserves = ___________ = demand deposits of public.
