finalexam052504 - Econ 52 Mark L.J Wright Economic Analysis...

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Unformatted text preview: Econ 52 Mark L.J. Wright Economic Analysis III [email protected] Spring 2004 Landau 336 Final Exam Date: Wednesday 9th June, 2004 Instructions 1. Answer each part of the exam in a separate blue book. 2. Write your name, student number, TA section and the part attempted on the front page of each blue book that you use. 3. Write your answers in permanent ink. Answers submitted in pencil, or in erasable ink, are not eligible for regrade requests. 4. You have one hundred and eighty (180) minutes to answer this exam. 5. The exam has f ve (5) pages. Please check that you have all pages. 6. There are one hundred and eighty (180) points worth of questions. Answer all questions. 7. This is a “closed book” exam. You may not consult your notes or textbooks during the exam. 8. No calculators are to be used on the exam. 9. You may not talk to any other student while completing the exam. Exam answers are to be completed, and handed in, individually. 10. Professor Wright will be available to answer questions during the f rst ten minutes of the exam. If you are confused about a question on the exam after the f rst ten minutes, explain why you are confused in your answer, state what you think is necessary to resolve your confusion, and then proceed to answer the question accordingly. 1 Part A (Short Answer Questions) (54 points total) Evaluate each of the following statements. State whether they are true, false or uncertain, and give a short explanation of your reasoning. No points will be awarded without the correct explanation. 1. If United Airlines buys a used Boeing 747 from American Airlines, the level of US GDP is unchanged. However, if it bought the airplane from British Airways, the level of US GDP would increase. (6 points) 2. Assume that people only value (and care about) the goods they can purchase in the market. Then if a Paasche index for real GDP is less than one, and a Laspeyres index for real GDP is greater than one, we can conclude with absolute certainty that living standards in this country have increased. (6 points) 3. According to the Solow-Swan growth model, if two countries are identical in every respect except that one has a higher population growth rate, that country will have higher levels of per capita output and welfare, and higher levels of output growth. (6 points) 4. According to the new growth model (also called the endogenous growth model), an increase in the savings rate increases the growth rate of the economy but has no long run e f ect on the level of output per person. (6 points) 5. In the Keynesian IS-LM model (in which prices are f xed and the AS curve is horizontal), the greater is the interest sensitivity of money demand, the greater will be the expansion in output...
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This note was uploaded on 04/29/2008 for the course ECON 102 taught by Professor Serra during the Winter '08 term at UCLA.

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finalexam052504 - Econ 52 Mark L.J Wright Economic Analysis...

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