Econ 102 Midterm
Chris Surro
Spring 2026
Name:
Student ID:
Exam Rules
1. The exam starts at 5pm and ends at 6:15pm.
2. The exam is out of 250 points. There are 8 multiple choice questions worth 12 points each
and three open response questions worth 50 points each. The last 4 points will come from
completing a pair of post-midterm surveys on Canvas (due within a week).
3. Make sure to fill in the scantron for multiple choice questions. You will not be given extra
time at the end. You must also fill out the version on your scantron. The white exam is
version A and the colored exam is version B. If you do not fill in the version, you will receive
a 10 point deduction.
4. You may use a calculator (including graphing calculator) and one 3x5 note card. You should
also have your Bruin ID and something to write with. Please put all other items away. If
you have a phone out for any reason you will be given a 0 on the exam.
5. Please make sure to write dark enough and avoid writing too close to the page margins as
we will be scanning your exams.
6. You must SHOW ALL WORK. No credit will be given for an answer with no work. You
may leave an answer unsimplified, but be clear about the steps you took to get there so the
graders can easily see if it’s correct.
7. If you have a question or need to use the bathroom, please raise your hand and a TA will
assist you.
1
, Multiple Choice (12 Points Each)
1. The government passes a stimulus package that includes three components: Stimulus
checks that provides $1200 directly to each individual, an infrastructure package building
new roads throughout the country, and a bank bailout that provides funding for struggling
banks. Which of these policies would directly increase GDP?
(a) All of these would increase GDP
(b) None of these would increase GDP
(c) Only the stimulus checks
(d) Only the bank bailout
(e) Only the infrastructure package
2. Which of the following is NOT a difference between the PCE deflator and the CPI
(a) The CPI measures prices of a fixed basket of goods, while the PCE deflator measures
prices based on actual quantities purchased
(b) The CPI puts higher weight on housing compared to the PCE deflator
(c) The CPI only measures prices of consumer goods while the PCE deflator
includes investment goods as well
(d) The PCE deflator is directly targeted by the federal reserve while the CPI is not
directly targeted
(e) Inflation measured using the CPI tends to be higher than inflation measured with the
PCE deflator
3. Assume that a country’s central bank targets an inflation rate of 2%. In 2025, the growth
rate of real GDP in the country was 6% and inflation is at the central bank’s target. In 2026,
the growth rate of real GDP falls to 3%. If the quantity theory of money is true, where
should the central bank set money supply growth in each year?
(a) 8% in 2025 and 11% in 2026
(b) 8% in both years
(c) 4% in 2025 and 1% in 2026
(d) 2% in both years
(e) 8% in 2025 and 5% in 2026
4. Assume that a firm with production function 𝑌 = 32𝐾 1/3 𝐿2/3 has a fixed quantity of
labor 𝐿 = 27 and is deciding how much capital to rent. If the real rental rate of capital is 6,
how much capital would this firm rent to maximize its profit?
(a) 13.5
(b) None of these
(c) 27
(d) 32
(e) 64
2
Chris Surro
Spring 2026
Name:
Student ID:
Exam Rules
1. The exam starts at 5pm and ends at 6:15pm.
2. The exam is out of 250 points. There are 8 multiple choice questions worth 12 points each
and three open response questions worth 50 points each. The last 4 points will come from
completing a pair of post-midterm surveys on Canvas (due within a week).
3. Make sure to fill in the scantron for multiple choice questions. You will not be given extra
time at the end. You must also fill out the version on your scantron. The white exam is
version A and the colored exam is version B. If you do not fill in the version, you will receive
a 10 point deduction.
4. You may use a calculator (including graphing calculator) and one 3x5 note card. You should
also have your Bruin ID and something to write with. Please put all other items away. If
you have a phone out for any reason you will be given a 0 on the exam.
5. Please make sure to write dark enough and avoid writing too close to the page margins as
we will be scanning your exams.
6. You must SHOW ALL WORK. No credit will be given for an answer with no work. You
may leave an answer unsimplified, but be clear about the steps you took to get there so the
graders can easily see if it’s correct.
7. If you have a question or need to use the bathroom, please raise your hand and a TA will
assist you.
1
, Multiple Choice (12 Points Each)
1. The government passes a stimulus package that includes three components: Stimulus
checks that provides $1200 directly to each individual, an infrastructure package building
new roads throughout the country, and a bank bailout that provides funding for struggling
banks. Which of these policies would directly increase GDP?
(a) All of these would increase GDP
(b) None of these would increase GDP
(c) Only the stimulus checks
(d) Only the bank bailout
(e) Only the infrastructure package
2. Which of the following is NOT a difference between the PCE deflator and the CPI
(a) The CPI measures prices of a fixed basket of goods, while the PCE deflator measures
prices based on actual quantities purchased
(b) The CPI puts higher weight on housing compared to the PCE deflator
(c) The CPI only measures prices of consumer goods while the PCE deflator
includes investment goods as well
(d) The PCE deflator is directly targeted by the federal reserve while the CPI is not
directly targeted
(e) Inflation measured using the CPI tends to be higher than inflation measured with the
PCE deflator
3. Assume that a country’s central bank targets an inflation rate of 2%. In 2025, the growth
rate of real GDP in the country was 6% and inflation is at the central bank’s target. In 2026,
the growth rate of real GDP falls to 3%. If the quantity theory of money is true, where
should the central bank set money supply growth in each year?
(a) 8% in 2025 and 11% in 2026
(b) 8% in both years
(c) 4% in 2025 and 1% in 2026
(d) 2% in both years
(e) 8% in 2025 and 5% in 2026
4. Assume that a firm with production function 𝑌 = 32𝐾 1/3 𝐿2/3 has a fixed quantity of
labor 𝐿 = 27 and is deciding how much capital to rent. If the real rental rate of capital is 6,
how much capital would this firm rent to maximize its profit?
(a) 13.5
(b) None of these
(c) 27
(d) 32
(e) 64
2
