MacroEcon MidTerm2 SP08 Answer Key

MacroEcon MidTerm2 SP08 Answer Key - ECON 4020 Spring 2008...

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ECON 4020 Spring 2008 Midterm exam 2 Name __________________________________________ This is a closed book exam. Exam is out of 100 points. Answer all the questions. Show all your calculations. Explain your answers in the essay type questions. You have 50 minutes to finish this exam. Academic Integrity: In cases of a violation of academic integrity it is the policy of the Department of Economics to impose the most severe penalties that are most consistent with University guidelines. Good Luck!
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1. (4 points) In a steady state (a) both consumption per worker and the capital-labor ratio are constant. (b) consumption per worker is constant, but the capital-labor ratio can change. (c) capital and labor, by definition, are inversely related to one another. (d) consumption per worker can change, but the capital-labor ratio is constant. Answer: A 2. (4 points) If the capital-labor ratio is above the Golden Rule capital-labor ratio, then in the steady state, (a) capital per worker is above its maximum. (b) output per worker is less than it would be at the Golden Rule capital-labor ratio. (c) investment per worker exceeds output per worker. (d) consumption per worker is not at its maximum. Answer: D 3. (4 points) Conditional convergence means that in the long run, (a) living standards converge only within groups of countries having similar characteristics. (b) living standards converge only for countries that have the same initial capital-labor
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MacroEcon MidTerm2 SP08 Answer Key - ECON 4020 Spring 2008...

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