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f01_ps1ans - 14.02 Principles of Macroeconomics Posted Due...

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14.02 Principles of Macroeconomics Posted: September 12, 2001 Due: September 21, 2001 PROBLEM SET 1 Solutions Part I. EXPLAIN TRUE OR FALSE (40 points) 1. (4 points) True. It will always be 1 1 c 1 ,where c 1 is the marginal propensity to spend. 2. (4 points) False. Output is a f ow so it can be measured as dollars per unit of time. But capital is a stock variable. 3. (4 points) False. True output is GDP plus all production that is not transacted in the market. 4. (4 points) False. If there is a de f ationary process then Nominal output can decrease. 5. (4 points) True. Part of the oil production is used by F rms to produce di f erent F nal goods. 6. (4 points) True. Part of the oil production is sold directly to consumers as a F nal good. 7. (4 points) True. The payment is in exchange for a service (safety). 8. (4 points) False. The payment is in exchange for nothing. It is just a transfer. 9. (4 points) False. A strong dollar makes the American economy less competitive with respect to other
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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.

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f01_ps1ans - 14.02 Principles of Macroeconomics Posted Due...

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