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303 Sample Questions #3 - University of New Mexico

Page 1 Econ 303: Intermediate Macroeconomics I Dr. Sauer Sample Questions for Exam #3 1. When firms experience unplanned inventory accumulation, they typically: A) build new plants. B) lay off workers and reduce production. C) hire more workers and increase production. D) call for more government spending. 2. After the Kennedy tax cut in 1964, real GDP: A) fell and unemployment rose. B) rose and unemployment fell. C) and unemployment both rose. D) and unemployment both fell. 3. The theory of liquidity preference implies that: A) as the interest rate rises, the demand for real balances will fall.

3. The theory of liquidity preference implies that: A) as the interest rate rises, the demand for real balances will fall. B) as the interest rate rises, the demand for real balances will rise. C) the interest rate will have no effect on the demand for real balances. D) as the interest rate rises, income will rise. 4.

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