ECON 1120 Midterm: Econ 1120_2012Fall_prelim2_regular_solution
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Econ 1120 intro macro fall-2012 november 1, 2012. There are two sections in this exam: part i: 15 multiple choice questions @ 3 points each, part ii: 2 short answer question (27 points) + 2 newspaper article questions (28 points, answer all questions. Total time = 90 minutes: prelim2 score counts for 25% of final grade. Fomc (federal open market committee) should sell securities. The fed should decrease the supply of the us dollar. The fed sells securities in the open market. The fed purchases of securities in the open market. Price level increases: i , iii, and v, ii, iv and vi, i, iv and v, ii, iv and v. 4: the crowding out effect associated with expansionary fiscal policy will be relatively small when, the fed implements expansionary monetary policy. Investment is very sensitive to changes in interest rate. Aggregate output: refer to the figure above.