Test1B - ECO 346 Spring 2008 Test 1B I abide by UNCG Integrity Code SECTION I Multiple Choice Questions(3 points each 1 Suppose your company is in

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ECO 346 Spring 2008: Test 1B I abide by UNCG Integrity Code: _________________________________________ SECTION I: Multiple Choice Questions (3 points each) 1. Suppose your company is in equilibrium, with its capital stock at its desired level. A permanent increase in the expected real interest rate now has what effect on your desired capital stock? a. Raises it, because the future marginal productivity of capital is higher b. Lowers it, because the future marginal productivity of capital is lower c. Raises it, because the user cost of capital is now lower d. Lowers it, because the user cost of capital is now higher 2. Which of the following will cause an upward shift in the production function relating output to labor? a. An increase in employment. b. An increase in the productivity of workers. c. A decrease in the productivity of workers. d. A decrease in employment. 3. Which of the following will shift the savings curve to the right in the goods market? a. An increase in real interest rate. b. An increase in wealth. c. An increase in current income. d. A decrease in interest rate. 4. In an economy that produces only two types of fruits, apples and bananas, the following are the output and price in the base year and current year. BASE YEAR CURRENT YEAR Fruit Quantity Price Quantity Price Apples 3000 bags $2 per bag 4000 bags $3 per bag Bananas 6000 bunches $3 per bunch 14000 bunches $2 per bunch 1
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This note was uploaded on 11/17/2008 for the course ECON 420 taught by Professor Hill during the Spring '08 term at UNC.

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Test1B - ECO 346 Spring 2008 Test 1B I abide by UNCG Integrity Code SECTION I Multiple Choice Questions(3 points each 1 Suppose your company is in

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