Fall_2008_midterm_2_sols

# Fall_2008_midterm_2_sols - Econ 201 Midterm 2 Fall 2008...

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Econ. 201, Midterm 2, Fall 2008 Name: Student ID: TA Name: Nic Joseph Erik Andrew Alex Time: 9 am 3 pm Directions: The exam is worth 60 points and you have one hour to complete it. Please answer the multiple choice in the box below. Whenever you’re asked to calculate a rate of change, use the log growth formula. Answers based on the discrete formula will not be accepted. Good luck! 1.b 6.d 11. b 16. b 21.a 2. c 7. d 12.b 17. b 22.a 3.c 8. b 13. a 18.a 23.c 4. a 9. b 14. c 19.c 24.d 5.b 10. b 15.c 20.e 25.c 1

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1. If a country has a population of 1,000, an area of 100 square miles, and a GDP of \$5,000,000, then GDP per capita is (a) \$500 (b) \$5,000 (c) \$50,000 (d) \$5,000,000 2. Technological progress allows workers to produce more (a) because it increases the amount of physical capital available. (b) because it increases the amount of human capital. (c) even when the amount of physical and human capital do not change. (d) only if the amount of physical capital grows at the same rate. Assume that an economy’s population which we assume is equal to their labor force is growing at 3% per year. Furthermore, assume that for every 1% increase in the labor force, GDP rises by .5%. 3. Then after 1 year, GDP is higher by (a) .5% (b) 1% (c) 1.5% (d) 3% 4. After 1 year, GDP per capita is higher by (a) -1.5% (b) 0% (c) 1% (d) .5% 5. Growth accounting enables us to (a) discover how long it takes for the economy to grow. (b) discover the eﬀects of technological progress on economic growth. (c) compare growth rates across countries. (d) better calculate real GDP per capita. 6. Which of the following would NOT quality as physical capital? (a) Shovel (b) Factory (c) Backhoe (d) Mineral Deposit 2
7. In an open economy, savings can come from (a) domestic sources. (b) foreign sources. (c) government sources. (d) all of the above. 8. The government saves when (a) tax revenue is smaller than government transfers plus government spending. (b) tax revenue is larger than government transfers plus government spending. (c) tax revenue is larger than government spending. (d) tax revenue is smaller than government spending.

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Fall_2008_midterm_2_sols - Econ 201 Midterm 2 Fall 2008...

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