Econ 4000
November 19, 1992

1.   The accelerator coefficient is the ratio of: ____________

2.   The planet closest to the earth is ____________.

3.   The second president of the United States was ______________________.

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

1.   Explain how it is equivalent to use the interest rate and the rate of return or present value and the cast of capital in making investment decisions.

2.   Fiscal policy can consist of either (or both) changes in taxes of expenditures.  How does each work on the economy?  In the long run what difference would your choice of policy make?

3.   What is Keynes explanation of the demand for money?  How has it been challenged?

4.   What is the Phillips curve?  What are the arguments to support this concept?  What phenomena might neutralize such a concept?

5.   Why is there a difference between short-run and long-run consumption functions?  What is this difference?

6.   Given the following in formation find the equilibrium level of income, consumption, investment, imports and the balance of trade.  Is the government's budget balanced?

      balanced?

      Y   =    C   +    I   +    G   +   X   -   M            a   = .85     b  =.12  t  = .2    m  =  .05

      C   =    C   +    a Y                                 C   =  30     T  = 40       I   =   84

     Y    =    Y   -     T                                    G   = 200    x  = 100    M    =  60

     T     =    T    +    t

      I     =    I     +    b

      M   =    M   +    m