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Macro2 Practice Questions

Macro2 Practice Questions - Prep101...

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©Prep101 www.prep101.com/freestuff Page 1 of 21 Practice Macro Exam #2 Q1. Suppose in Highland, it takes 6 hours to produce 1 litre of milk and 2 hours to produce1 lbs of fish, whereas in Lowland, it takes 2 hours to produce 1 litre of milk and 1 hour to produce1 lbs of fish. Both countries would be better off by trading at a relative price of milk ranging a) Between 2 and 3 lbs of fish per litre of milk b) Between 1/3 and 1/2 lbs of fish per litre of milk c) Between 1 and 3 lbs of fish per litre of milk d) Between 1/2 and 3 lbs of fish per litre of milk e) Between 1/3 and 2 lbs of fish per litre of milk Q2. Assume the government pays a statistician at the Statistics Canada \$60,000 in salary in 2004, and \$40,000 in retirement benefits in 2005. Q3. All else equal, a decrease in the US interest rates would Q4. If a country reported nominal GDP of 200 billion in 2005 and 150 billion in 2004 and reported a GDP deflator of 125 in 2005 and a GDP deflator of 120 in 2004 then from 2004 to 2005,

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