Problem_set_1_sol

# Problem_set_1_sol - PROBLEM SET#1 SOLUTIONS EC202 FALL...

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P ROBLEM S ET #1 - S OLUTIONS EC202 – F ALL 2010 (I NSTRUCTOR : O LIVETTI ) ****************************************** S ECTION 1 – M ULTIPLE C HOICE , 30 POINTS TOTAL 1 POINT FOR EACH QUESTION ****************************************** 1. Based on the data in Table 2.2, personal consumption expenditure is: a . \$3.7 trillion. c . \$8.9 trillion. b . \$9.7 trillion. d . none of the above. ANS: C 2. Based on the data in Table 2.2, gross private investment is: a . \$1.0 trillion. c . \$5.1 trillion. b . \$4.3 trillion. d . none of the above. ANS: C 3. Based on the data in Table 2.2, government purchases are: a . \$0.9 trillion. c . \$0.6 trillion. b . \$2.4 trillion. d . none of the above. ANS: B 4. Based on the data in Table 2.2, net exports of goods and services are: a . \$0.7 trillion. c . -\$0.7 trillion. b . \$3.3 trillion. d . none of the above. ANS: C 5. Based on the data in Table 2.2, gross domestic product is: a . \$17.7 trillion. c . \$19.7 trillion. b . \$15.7 trillion. d . none of the above. ANS: B

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6. Base on the data in Table 2.4, gross national product (GNP) is: a . \$11.4 trillion. c . \$12.5 trillion. b . \$12.6. trillion. d . none of the above. ANS: B 7. Based on the data in Table 2.4, net national product is: a . \$11.0 trillion. c . \$12.6 trillion. b . \$11.4 trillion. d . none of the above. ANS: A 8. Based on the data in Table 2.4, national income is: a . \$7.4 trillion. c . \$8.9 trillion. b . \$11.0 trillion. d . none of the above. ANS: B 9. Based on the data in Table 2.4, personal income is: a . \$10.2 trillion. c . \$11.8 trillion. b . \$10.4 trillion. d . none of the above. ANS: B 10. Based on the data in Table 2.4, disposable personal income is: a . \$10 trillion. c . \$9.2 trillion. b . \$7.4 trillion. d . none of the above. ANS: C 11. If the production function Y = A • (K,L) is divided by L, then a . (Y/L) = A•f(K/L). c . y = A•f(k). b . output per capita equals technology times a function of the capital labor ratio. d . all of the above. ANS: D
12. The growth accounting formula is: a . c . b . d . Y= A • F(K,L) ANS: A 13. The labor force participation rate is: a . the labor force divided into population. c . the labor force times population. b . the labor force divide by population. d . the labor population minus the labor force. ANS: B 14. If there are 120 machines in an economy and the depreciation rate is 10% per year, then next year there are: a . 10 of the original machines left. c . 108 of the original machines left. b . 12 of the original machines left. d . 110 of the original machines left. ANS: C 15. In the steady state of the Solow growth model: a . c . b . d . ANS: A 16. In the Solow growth model the optimal capital to labor ratio, K/L, is where: a . s + n = s•(k/y).

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Problem_set_1_sol - PROBLEM SET#1 SOLUTIONS EC202 FALL...

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