Midterm 2 _Key_

Midterm 2 _Key_ - Spring 2007 Name: _ Circle one: 10:10...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Spring 2007 Name: __________________________ Circle one: 10:10 section, 11:10 section 1/5 Principles of Macroeconomics Midterm 2 (Key) You’ll have fifty minutes to complete this exam. Be sure to label all your curves and axes. If you have any questions during the course of the exam, feel free to ask me. Good luck! 1) Demographers use “population pyramids” as an easy way to visually depict a country’s age distribution. The diagram takes its name from the shape you would normally expect to see. For instance, consider this very typical example: Interestingly, because of a spike in births following World War II (i.e., the “Baby Boom”), America’s current age distribution looks nothing like the above example. Here is America’s 2007 population pyramid: This figure shows that within the next ten to twenty years, the U.S. will experience an unprecedented surge in workers retiring from the labor force.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
2/5 A) Holding capital (K) and technology (T) constant, the surge in retirement brought on by the Baby Boom would be expected to cause. .. ... LAS to increase, decrease, or remain the same? Briefly explain your answer. [5 points] The LAS curve shifts due to changes in K, T, or L FE . While K and T aren’t changing in this problem, the size of the full-employment labor force will decrease as Baby Boomers retire. This will cause a decrease in LAS, shown as a leftward shift of the LAS curve. ... SAS to increase, decrease, or remain the same? Briefly explain your answer. [5 points] The LAS curve shifts due to changes in K, T, or L FE , and also due to changes in input prices. As I said above, the size of the full-employment labor force will decrease as Baby Boomers retire. This
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 05/13/2010 for the course ECON 323 taught by Professor Jakes during the Spring '10 term at Alcorn State.

Page1 / 5

Midterm 2 _Key_ - Spring 2007 Name: _ Circle one: 10:10...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online