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Midterm 2

# Midterm 2 - Midterm 2 spring 2007 1.Assume that average...

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Midterm 2 spring 2007 1.Assume that average labor productivity is the same in each country. Based on the information below, which country has the smallest real GDP per capita? P o p u l a t i o n S h a r e o f P o p u l a t i o n C o u n t r y ( m i l l i o n s ) E m p l o y e d ( % ) A 1 0 0 6 0 B 1 5 0 5 5 C 7 5 5 0 D 2 5 0 4 5 E 9 5 4 0 A) Country A B) Country B C) Country C D) Country D E) Country E 2.The benefits of economic growth are _____, while the costs of economic growth are _____. 3.International data on the relationship between the amount of capital per worker and average labor productivity indicate that there is a:

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When a worker learns how to use a new business-related software program, this is an example of investing in: Real GDP per person in Westland is \$30,000, while real GDP in Eastland is \$10,000, However, Westland's real GDP per person is growing at 1.5 % per year and Eastland's is growing at 3% per year. If these growth rates persist indefinitely, then: A) Westland's real GDP per person will decline until it equals Eastland's. B) Westland's real GDP per person will always be greater than Eastland's. C) Eastland's real GDP per person will always be less than Westland's. D) Eastland's real GDP per person will eventually be greater than Westland's. E) Eastland's real GDP per person will catch up to Westland's, but never exceed Westland's. Answer: D Learning Objective: Small differences in growth rates Level of Learning: Comprehension Type: Word Problem Source: Web Real GDP per person in both Alpha and Omega equals \$2,000. Over the next 100 years real GDP per person grows at 1.5 percent annual rate in Alpha and at a 2.5 percent annual rate in Omega. After 100 years real GDP person in Alpha is _____ smaller than real GDP per person in Omega. A) \$2,000 B) \$7,382 C) \$14,763 D) \$24,954 E) \$57,837 Answer: C Learning Objective: Small differences in growth rates Level of Learning: Application Type: Word Problem Source: Unique
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