Spring
1999
NAME
(Please Print) _____________________________________
Part A: Short Answer Questions
1. Use
a graph to show the implications of a binding minimum wage law. Use
the graph to show who wins (gains) and who loses. (10 pts)
2. What
is the Fisher Effect? Define
all terms. (10 pts)
3. Briefly
explain the article Confounding Common Sense, by Milton Friedman.
(10 pts)
4. Use
the aggregate demand / aggregate supply model to show a recessionary gap.
(10 pts)
5. The
problem is high unemployment.
Use both fiscal and monetary policy to fix the problem.
(20 pts)