Econ 4000 Exam #1
Name
Oct. 16,2003

1. Keynes middle name is ______________________.

2. The newly elected governor of California was born in _________________________.

3.   There are _______________ feet in a mile.  

Answer four (4) of the following six (6) questions:  

1.          How do the following relate to macroeconomics? The General Theory of Employment, Interest and Money,
        Say's Law, National Income Accounting, labor force participation, trade balance, and potential vs. actual GDP.

2.          What are the basic assumptions of a classical model? How are they important to the conclusions generated?

3.          What are the policy implications of a classical vs. a Keynesian model? Be clear.  What in the model supports your                
        conclusion?

4.         What makes GDP so hard to measure?

5.          What are the functions of money? How do they relate to the smooth running of an economy? Who controls the money supply
       and what difference does its control make?

6.          Where Y = C + I + G and
        C = 10 + 5/6(Yd)
        Yd=Y-T
        T = 2/5 Y
        I = 40 - 2 R
       G=80

            What is the IS curve? (Is given in terms of what variables?)  

            Where Ms = 70 and
            D$ = f(Y) + f(R)
            And f(Y) = ¼ Y and f(R) = 80 - R.  

            What is the equation for the LM curve?  

            What is the potential use of these two equations?

            Can you show this?