Spring 06 Exam 1 Ans - Name: _ANSWERS_ (Last name, first...

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Spring 2006 (Solow Growth Model) 1 Name: ____ ANSWERS ______ (Last name, first name) SID: ____________________ Lecture (1 or 2): ____________________ UGBA 101B Macroeconomic Analysis for Business Decisions Dr. Steven Wood Spring 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 February 16, 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, preferably blue and then green. Do NOT open this test until instructed to do so.
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Spring 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. According to supply-side economics, lower tax rates stimulate higher productivity and more private saving. So, according to this theory, a fall in tax rates WILL ALWAYS, in the long run: a. Increase income-per-worker. b. Reduce income-per-worker. c. Lead to greater investment. d. Could be either a. or b. 2. From your study of the Solow Growth Model and New Growth Theory, what would be the BEST policy to promote higher standards of living in the United States: a. A higher private saving rate. b. Better incentives for more innovation. c. Increased exports. d. Lower government budget deficits. e. Faster money growth. 3. Suppose that the monetary authority is committed to keeping nominal GDP constant. Then, if the velocity of money falls, it will: a. Permanently increase the rate of money growth. b. Raise interest rates. c. Increase the money supply. d. Reduce the money supply. e.
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This note was uploaded on 02/15/2010 for the course UGBA 08481 taught by Professor Levine during the Spring '09 term at University of California, Berkeley.

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Spring 06 Exam 1 Ans - Name: _ANSWERS_ (Last name, first...

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