Drexel University
Econ 202: Principle of Macroeconomics
Winter 2012 - Practice Midterm
Professor: Marco Airaudo Name and Section
Instructions: you have 1h and 30í to complete the exam. For the multiple choice part, you do not have to
motivate your answer (just pick what you think is the correct one). For the short answers part, you have to
write your answers within the blank space provided at the end of each question. Please label your answers
correctly. In order to get full (or even partial) credit you have to show your work.
MULTIPLE CHOICE SECTION (30 Points Total, 3 Points each)
1. Suppose that foreign prices increase. Which of the followings is most likely to happen?
(a) Net exports would increase
(b) Net exports would decrease
(c) No impact on net exports
(d) Exports will be equal to imports
2. Which of the followings will be most likely to shift the consumption function upward
(a) a stock market crash
(b) a price level increase
(c) lower real estate wealth
(d) lower interest rates
3. Suppose that between 2008 and 2009 nominal GDP in the US grew by 3% and that between the same
years ináation was 1%. The growh rate of real GDP between 2008-9 was:
(a) 2%
(b) 3%
(c) 4%
(d) we can not tell
4. Total spending in the economy is equal to:
(a) C+I+GX+IM
(b) CI+G+XIM
(c) C+IG+XIM
(d) C+I+G+XIM
5. The CPI measures
(a) the total amount of goods and services produced in the economy in a given year
(b) the average interest rate in the economy
(c) the rate of unemployment
(d) the average cost of living in the economy
6. The nationís DI increases by $500 billion, and, as a result, consumption (C) increases by $300 billion.
Therefore, the MPC equals
(a) $200 billion
(b) 1.66
(c) +0.6
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