midterm2005fall - ECO320L-Macroeconomic Theory Midterm...

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ECO320L-Macroeconomic Theory Midterm 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. 4. Show your work (Just answer to a problem will not earn any points). Good Luck! 1
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Multiple Choice Questions (2pts each) 1. Because government services are not sold in markets, a they are excluded from measurements of GDP. b the government tries to estimate their market value and uses this to measure the government’s contribution to GDP. c they are valued at their cost of production. d taxes are used to value their contribution. 2. National saving equals private saving plus government saving, which in turn equals a C + S + T. b GDP + C + G. c GDP + NFP. d GDP + NFP - C - G. 3. 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. 4. Labor supply curve of a consumer will decrease with an increase in proportional income tax if a the substitution effect is larger than the income effect. b the income effect is larger than the substitution effect. c the income effect is equal to the substitution effect. d leisure is a normal good. 5. Nations such as Egypt and Turkey may have wide differences between GNP and GDP because both countries a have a high level of imports and exports relative to GNP. b have a large portion of their GNP produced by multinational corporations. c have a large number of citizens working abroad. d purchase large amounts of military wares from other countries. 6. In the expenditure approach to GDP, which of the following would be excluded from measurements of GDP? a government payments for goods produced by foreign firms b government payments for goods produced by firms owned by state or local governments c government payments for welfare d all government payments are included in GDP 2
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7. The uses-of-saving identity shows that if the government budget deficit rises, then one of the following must happen: a Private saving must rise, investment must fall, and/or the current account must fall. b
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This note was uploaded on 02/04/2011 for the course ECON 320 taught by Professor Azzamonti during the Fall '08 term at University of Texas at Austin.

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midterm2005fall - ECO320L-Macroeconomic Theory Midterm...

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