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W3213midterm2014 - YOUR NAME_ Columbia University...

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YOUR NAME__________________________________Columbia University Intermediate Macroeconomics W3213,Midterm Exam Fall 2014 (A.D.), Professor XavierNOTE:YOU ARE NOT ALLOWED TO USE CALCULATORS!!!!Question 1 - Short Speechesa.Many economists like Thomas Piketty show that inequalities in the UnitedStates, the UK, Sweden, France and many other countries had beenincreasing over the last few decades. How is this consistent with theresults showed in class that showed that global income inequalities hadbeen shrinking? Explain.b.In theories of poverty traps, small amount of aid tend to have no long-runeffects on the level of income. However, large amounts of aid would work.Please use economic models to discuss this statement.
Question 2 - More short speechesa.In the neoclassical growth model, there are diminishing returns tophysical capital and diminishing returns to human capital. Butthere are constant returns to scale. Hence, the economy can growforever by accumulating both kinds of capital without ever facing

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Term
Winter
Professor
NoProfessor
Tags
Economics, Macroeconomics, Asian economy

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