Substitution of one good for another good.

 

 

Quiz 1
Name _________________________________________
From our Solow model list 2 endogenous variables and 2 exogenous variables.
Endogenous
1) _______________________
2) _______________________
Exogenous
3) _______________________
4) _______________________
5) Macroeconomics deals with:
a) the overall performance of the economy.
b) how individual markets work.
c) relative prices in different markets.
d) substitution of one good for another good.
List 2 prices Macroeconomics deals with
6) _______________________ 7) _______________________
Monetary policy involves:
8)
9)
10)
11) The unemployment rate is:
a) the fraction of the labor force with no job.
b) the fraction of the population with no job.
c) the rate of growth of those with no job.
d) the rate of growth of those seeking work.
12) Fiscal policy involves:
a) government expenditures.
b) determining exchange rates.
c) interest rates.
d) all of the above.
13) The price of labor is the:
a) exchange rate. b) interest rate. c) wage rate. d) the rental price.
14) The U.S. annual inflation rate since the late 1970s has been approximately what? _____________%
15) A macroeconomic model which uses a microeconomic foundation will begin with
a) a macroeconomic model, which is then disaggregated to form a microeconomic model.
b) a microeconomic model, which is then aggregated to form a macroeconomic model.
c) a macroeconomic model, which is then aggregated to form a microeconomic model.
d) a gold standard model, which is then held exogenous to form a macroeconomic model.
16) A TRUE / FALSE : flow variable measures the dollar amount of goods at a specific point in time.
17) Real GDP measures the:
a) dollar value of all goods and services produced in an economy at a point in time.
b) dollar value of all goods and services produced in an economy during a specified time period.
c) the constant dollar value of all goods and services produced in an economy at a point in time. T
d) the constant dollar value of all goods and services produced in an economy during a specified time period.
18) Personal consumption expenditure includes:
a) Hair cuts.
b) Airbus planes.
c) homes.
d) all of the above.
Quiz 1
19) Net imports of goods and services equals:
a) imports + exports. b) imports – exports. c) exports – imports. d) all of the above.
20) Depreciation is:
a) when a student forgets their math skills from
high school after a number of years.
b) capital used up producing today’s output.
c) Pigs drown in a hurricain.
d) all of the above.
21) Give one issue or problem with using the CPI to capture the average price of goods paid for by American
consumers over time.
22)
23) TRUE / FALSE : Diminishing returns to labor implies that eventually the marginal product of labor will
alway be positive.
24) If A in the production function Y = A • F(K,L) rises, then:
a) output rises for any level of K and L.
b) the marginal product of capital rises.
c) the marginal product of labor rises.
d) all of the above.
25) If A in the production function Y = A • F(K,L) doubles, while K and L remain the same, then
a) output doubles.
b) the marginal product of capital falls.
c) the marginal product of labor falls.
d) output increases by less than double.
26) The marginal product of labor is:
a) how output rises for when labor increases.
b) labor divided by capital (L/K)
c) capital divided by labor (K/L).
d) the level of technology.
27) Diminishing marginal product of capital (MPK) means:
28)
29) In the Solow growth model the economy reaches the optimal k*:
a) always. b) randomly. c) over a period of time. d) cyclically.
30) At this point in the class The Solow growth model assumes unemployment is:
a) zero. b) rising. c) falling. d) constant.
31) The Solow growth model shows that the growth rate of real GDP per worker depends on:
a) the saving rate, s
b) the inflation rate .
c) size of the labor force.
d) all of the above.
32) During the transition to the steady state in the Solow growth model:
a) the output per worker rises.
b) the rate of growth of capital rises.
c) labor force participation rises.
d) all of the above.
33) In the steady state for the Solow growth model,
a) the labor per technology unit ratio increases.
b) the capital per worker ratio increases.
c) labor per technology unit ratio no longer moves.
d) the capital per worker ratio no longer moves.
Quiz 1
34) In the Solow growth model, if technology, A, improves, then in the steady state:
a) output per worker grows faster.
b) capital per worker grows faster.
c) output per worker grows at the same rate, 0
d) all of the above.
35) If the level of technology increases in the Solow growth model, then in the steady state
a) capital per worker will be higher.
b) the growth rate of capital will be lower.
c) saving per worker will be higher.
d) capital per worker will be the same.
36) If the saving rate decreases in the Solow growth model, then in the steady state
a) capital per worker will be higher.
b) the growth rate of capital will be smaller.
c) output per worker will be higher.
d) none of the above.
37) When converging economies:
a) have the same growth rate of capital per worker.
b) have the same growth rate of output per worker.
c) the same steady state capital per worker, k*.
d) all of the above.
38) In the Solow growth model with technological progress,
a) k* is constant. b) k* is cyclical. c) k* is growing d) k* is declining.
39) What is an example of a non-rival good:
40)
41) In exogenous growth models, technological progress comes from:
a) outside the system.
b) increases in the capital stock.
c) research and development.
d) all of the above.
42) To encourage firms to engage in research and development (R&D), governments grant temporary monopolies
in the production of the goods that result from R&D called:
a) patents.
b) anti-trust exemptions.
c) land grants.
d) all of the above.
43) If intellectual property rights become better secured, then:
a) the costs of R&D are greater.
b) the private returns to R&D are greater.
c) the costs of R&D are smaller.
d) the private returns to R&D are smaller.
44) Diffusion of technology means:
a) how many industries a technology can be used in.
b) how expensive a technology is.
c) describes the imitation and adaptation of technology from country to country.
d) how many scientist had to work on a technology.
45) A country which has a poorly-performing judicial system will experience
a) an increase in efficiency, which increases productivity and the steady-state real GDP per worker.
b) an increase in saving, which increases the steady-state real GDP per worker.
c) decrease in efficiency, which decreases productivity and the steady-state real GDP per worker.
d) an increase in saving, which decreases the steady-state real GDP per worker.
46) What are two shortcomings of real GDP per capita from a welfare perspective ?
47)
Quiz 1
48) Explain why a poistive savings rate does not mean that capital per worker will definately rise over time ?
49)
50)
51) What is the difference between absolute convergence and conditional convergence in the class?
52)
53) Average GDP growth in the United States is approximately the same before and after world war 2. What is
different about those growth periods.
54)
55) Explain the difference between the 3 approaches for measuing/conceptualizing Real GDP.
56)
57)
FOR THE REST OF THE TEST Assume Y = A*K.5
*L.5
58) In equation form- what is the marginal product of capital ?
____________________________________________________________________________________
59) In equation form what is the marginal product of labor ?
____________________________________________________________________________________
60) How do we know that each is diminishing.
____________________________________________________________________________________
61) Prove that if you double capital and double labor Y doubles.
____________________________________________________________________________________
62) What is the characteristic described above called in words ?
Quiz 1
63) Write out the Solow Equation for the growth rate of capital per worker as a function of y/k, s, n, and
depreciation.
64)
65)
66)
67)
68) Given the production function: Y = A*K.5*L.5 . Derive the equation for y/k as a function of just A and k.
69)
70)
71)
72)
73) Given the production function: Y = A*K.5*L.5 . Derive the equation for k* as a function of just A, s, n, and
depreciation.
74)
75)
76)
77)
78) Given the production function: Y = A*K.5*L.5 . Derive the equation for y as a function of just A and k.
79)
80)
81)
82)
Given the production function: Y = A*K.5*L.5. Assume Technology is 1. Savings rate = 5%, depreciation rate =
10% and population growth rate = 2%.
83) What is the steady state amount of capital per worker?
84)
85)
86) What is the steady state output per worker ?
87)
Quiz 1
88) If the depreciation rate is increased during a prolong war to 30% – what is the new steady state of capital ?
89)
90)
91) What is the steady state output per worker ?
92)
93) By what percent does output per worker fall.
94) Assume the war ends and depretiation returns to 10%. Further assume at the end of the war capital per
worker is 1. How fast does capital per worker grow in the first year after the war ?
95)
96)
97) What does this equation tell us : dy*/y = g/(1 – a)
98)
99) If techology grows at a rate of 1% per period- how fast does output per worker grow in the long run or steady
state if the production function is Y = A*K.5
*L.5

 

 

Sample Solution

The Jaguar Poem Puma is about an excursion to the zoo to the wire. In this stanza he portrays the creatures in the zoo and their conduct. It thinks about Jaguar, a creature unique in relation to other creature’s way of life, primates, parrots, tigers, lions and pythons. This sonnet initially clarifies “Yawn” and “their love”, and the way that they are under the sun builds sluggishness. I feel that this line was purposely picked to pass on the fatigue of the zoo’s day by day life and set laziness. Panther is a sonnet about the savage creatures Ted Hughes discovered something about human instinct. By all accounts, this sonnet is a creature’s sonnet suggestive of Jaguar’s outrage and viciousness. This is an emblematic sonnet about the vitality of creatures. Here, the writer uncovers his idea through seeing the zoo. Mandrills, parrots, just as creatures, for example, snakes, tigers and lions appear to be extremely happy with the current circumstance. These creatures were fretful on the grounds that they were detained. For instance, the priests yawn and thunder when they revere bugs under the sun. Parrots are yelling or gladly moving to stand out for spectators. Tigers and lions are as yet lying under the sun so they look drained and look sluggish. Indeed, every one of these creatures are lethargic and depleted. Indeed, even Python appears to lose its capacity and speed like antiquated fossils. How successfully do Jaguar Hughes of Ted Hughes pass on the intensity of Jaguar? Ted Hughes’ sonnet “Panther” clarifies the creatures in the zoo and their method of living. Additionally contrast them and Jaguars not quite the same as other creature’s way of life. The panther delineated in this sonnet is ground-breaking, how? The principal line of Ted Hughes verse is Jaguar. “The monkey will yawn under the sun and respect their bugs.” Starting with the initial three words … Get him so as to lie (Golman) Ted Bundy said that this current nation’s history It is one of the most well known mental patients among (Nordheimer). Appealing (Bointon 25). His casualties are not terrified of him in light of the fact that Bondi and individuals believe that the sequential executioner resembles the inverse (“Ted Bondi”). Sequential executioner master Robert Kappel said. It would be ideal if you reveal to me a sequential executioner can

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