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2008FALL-Material

2008FALL-Material - ECO320L-Macroeconomic Theory Midterm 1...

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ECO320L-Macroeconomic Theory Midterm 1 Total 100 points NAME: ............................................................. Some Remarks: 1. Books and notes should be closed. 2. You can use a calculator. Exchange of calculator is not allowed. 3. Do not forget to label axes when you draw a graph. Good Luck! 1

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Total Exam Grade: ( ......... /100pts) Multiple Choice Questions ( ......... /44pts) (4pts each) 1. Suppose that the BMW plant in Spartanburg, SC, produces \$10 million worth of vehicles in a given year. Of this total amount, \$1 million in profits are returned to the owners of the company in Germany. The \$1 million in profits a contributes to both U.S. GDP and U.S. GNP. b contributes to U.S. GNP, but not U.S. GDP. c contributes to U.S. GDP, but not U.S. GNP. d contributes to neither U.S. GDP, nor U.S. GNP. 2. When the inflation rate is positive, a growth in nominal GDP exceeds growth in real GDP. b growth in real GDP exceeds growth in nominal GDP. c growth in real GDP and nominal GDP are roughly equal. d there can never be any growth in nominal GDP. 3. Assume that private domestic investment is \$800 billion and the government is currently running a \$100 billion deficit. Net factor payments for the US is almost zero. If households and businesses are saving \$1,000 billion, what is the value of net exports?
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2008FALL-Material - ECO320L-Macroeconomic Theory Midterm 1...

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