Midterm 2 Spring 2006

# Midterm 2 Spring 2006 - Economics 100 Midterm...

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Economics 100 – Midterm Exam #2 (Multiple Choice) YOU KEEP THIS SHEET. Page 1 of 6 Instructions: This is a closed-book exam. You have 75 minutes to complete the exam. You must hand in the exam by 10:45. Use neither notes nor the text to assist in the preparation of your answers. The examination consists of two parts: 25 multiple-choice questions and one problem. You are to answer the multiple choice questions on the Scantron sheet. You are to answer the problem in the space provided. Good Luck! Multiple Choice Questions 1. Since 1960, the fast-growing nations (the so-called growth “miracles”) have been in _______, while the slow-growing nations (the so-called growth “disasters”) have been in _________. a. East Asia; Western Europe b. East Asia; Sub-Saharan Africa c. Western Europe; Sub-Saharan Africa d. Western Europe; East Asia e. Sub-Saharan Africa; East Asia 2. Since 1960, growth in real GDP per person has averaged around what percent in the United States ? a. 0.0 percent. b. 1.0 perent. c. 2.0 percent. d. 5.0 percent. e. 10.0 percent. 3. Suppose that you put \$100 (the principle) in a savings account that earns an interest rate r of 5%. Using the compound interest formula, what will be your return after 14 years? a. \$100. b. \$105. c. \$114. d. \$170. e. \$200. 4. According to the Rule of 70, an economy whose growth rate falls from 5 percent to 2 percent will a. increase the number of years to double its real GDP per capita from 2 to 5 years. b. increase the number of years to double its real GDP per capita from 5 to 70 years. c. increase the number of years to double its real GDP per capita from 14 to 35 years. d. decrease the number of years to double its real GDP per capita from 70 to 5 years. e. decrease the number of years to double its real GDP per capita from 35 to 14 years.

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Economics 100 – Midterm Exam #2 (Multiple Choice) Spring 2006 Page 2 of 6 5. In the long-run growth model, average labor productivity ( Y/N ) depends on all the following except a. human capital per worker. b. physical capital per worker. c. money per worker. d. natural resources per worker. e. technology per worker. Number of Total Packages (Identical) Machines Wrapped 1 5,000 2 9,000 3 12,000 6. If the production process described above is subject to diminishing returns to capital, then the total packages wrapped when a fourth machine is installed must be less than _____ packages. a. 3,000 b. 4,000 c. 12,000 d. 13,000 e. 15,000 7. Countries with small amounts of physical capital per worker ( K / N ) tend to have ______ levels of real GDP per person ( Y / POP ) and _____ levels of average labor productivity ( Y / N ). a. low; low b. low; high c. high; low d. high; high 8. In 1980, the Stanford biologist Paul Ehrlich bet Maryland economist Julian Simon that the real prices (adjusted for inflation) of five metals would rise over the next ten years. What happened?
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Midterm 2 Spring 2006 - Economics 100 Midterm...

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