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Unformatted text preview: TEST 2 (Practice) Macroeconomic Theory Please answer the following questions. Be BRIEF and only write on the space provided. No extra points will be given if you just &ll the space with words. Work alone and do not use any type of external help. You have 80 minutes to work on your test. NAME: 1. (1 point) State the &rst welfare theorem. 2. (1 point) Enumerate the Development Facts. 3. (1 point) What is the demographic transition? 4. (1 point) Why is Growth Accounting useful? 5. (1 point) What was the productivity slowdown? 6. (2 points) De&ne a competitive equilibrium for the basic economy that we presented in class. 7. (1 point) Show that Y = ( K & + L & ) 1 & presents constant returns to scale. 8. (1 point) A representative &rm has a production function y = k & l 1 & & . The input prices it pays are & and w . Imagine that, suddenly a health insurance mandate is introduced, and the wage the &rm needs to pay is (1 + ) w where is the health insurance premium. What will happen with the &rms input? (you can assumewill happen with the &rms input?...
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This note was uploaded on 05/13/2010 for the course ECON 110D taught by Professor Schmitt-grohe during the Spring '08 term at Duke.
- Spring '08