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Unformatted text preview: 14.02 Principles of Macroeconomics Posted: September 12, 2001 Due: September 21, 2001 PROBLEM SET 1 Part I. EXPLAIN TRUE OR FALSE (40 points) 1. (4 points) In the goods market the multiplier will always be greater than 1. 2. (4 points) Capital and output can be measured in dollars per unit of time. 3. (4 points) GDP is greater than true output. 4. (4 points) If real output increases then nominal output also increases. 5. (4 points) Oil is a final good. 6. (4 points) Oil is an intermidiate good. 7. (4 points) When measuring GDP you have to add the wage the government pays to a police oﬃcer. 8. (4 points) When measuring GDP you have to add the pension the government pays to a veteran. 9. (4 points) The strength of the dollar will help the American industry. 10. (4 points) Japan is worried because of a low 3 % annual growth per year during the last decade. Part II. INFLATION AND REAL GROWTH (30 points) Utopia produces only two goods: Coke and oil. In 2001 production reached 200 cans of Coke and 170 barrelsUtopia produces only two goods: Coke and oil....
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This note was uploaded on 11/29/2009 for the course 14 14.02 taught by Professor Geurrieri during the Fall '09 term at MIT.
- Fall '09