Exam1ans_Sum06

Exam1ans_Sum06 - Name: _ANSWERS_ (Last name, first name)...

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Summer 2006 (Solow Growth Model) 1 Name: ____ ANSWERS ______ (Last name, first name) SID: ____________________ UGBA 101B Macroeconomic Analysis for Business Decisions Professor Steven Wood Summer 2006 Exam #1 ANSWERS Please sign the following oath: The answers on this test are entirely my own work. I neither gave nor received any aid while taking this test. I will not discuss the questions on this test until after 5:00 p.m. on June 6, 2006. ______________________ Signature Any test turned in without a signature indicating that you have taken this oath will be assigned a grade of zero. Graph Instructions When drawing diagrams, the following rules apply: a. Completely , clearly and accurately label all axis, lines, curves, and equilibrium points. b. The original diagram and equilibrium points MUST be drawn in black. c. The first shift of any line(s) and the new equilibrium points MUST be drawn in red. d. Any subsequent shifts in curves and new equilibrium points MUST be drawn in another color, first blue and then green. Do NOT open this test until instructed to do so.
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Summer 2006 (Solow Growth Model) 2 A. Multiple Choice Questions . Circle the letter corresponding to the best answer. (3 points each; total of 30 points.) 1. Consider the following 2 facts: a) High-income people save a larger proportion of their incomes than do low-income people and b) an increase in income inequality can lead to a fall in productivity due to political unrest. Then, according to the Solow Growth Model, a rise in income inequality will: a. Raise the standard of living. b. Lower the standard of living. c. Have an indeterminate effect on the standard of living. d. Increase steady state growth. e. Reduce steady state growth. 2. National savings are the sum of private and government savings. Across countries there are strong correlations between national savings and investment. This suggests that, on average: a. The current account is positive. b. The current account is negative. c. Exports are equal to imports. d. Government expenditures are equal to government revenues. e. Governments run budget deficits. 3. Recently in the U.S., the labor share of national income has fallen. This means: a. Productivity has fallen. b. Productivity has risen. c. Economic growth has fallen. d. Labor force growth now has a larger effect on economic growth. e. Capital stock growth now has a larger effect on economic growth. 4.
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Exam1ans_Sum06 - Name: _ANSWERS_ (Last name, first name)...

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