Spring_2010_-_Exam_1_BLUE_M5

Spring_2010_-_Exam_1_BLUE_M5 - C A Guns Butter B 1. D In...

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C A Guns Butter B D 1. In 1931, President Herbert Hoover was paid a salary of $75,000. Government statistics show a consumer price index of 15.2 for 1931 and 207 for 2007. President Hoover’s 1931 salary was equivalent to a 2007 salary of about a) $5507. * b) $1,021,382. c) $1,140,000. d) $15,525,000. 2. Suppose that real GDP grew more in Country A than in Country B last year. a) Country A must have a higher standard of living than country B. b) Country A's productivity must have grown faster than country B's. c) Both of the above are correct. * d) None of the above is correct. 3. Other things the same, if a country increased its saving rate, in 40 years or so it would likely have a) higher productivity, and a higher growth rate of real GDP. * b) higher productivity, but not a higher growth rate of real GDP. c) the same productivity and growth of real GDP it began with. d) None of the above is correct. 4. Other things the same, which of the following best describes the response of output as time passes to an improvement in technology? a. The growth rate of output does not change. b. The growth rate of output increases and gets even larger as time passes. c. The growth rate of output increases to a higher level and remains at this higher level as time passes. * d. The growth rate of output increases, but diminishes to its former level as time passes. 5. On the basis of theory and empirical evidence, economists have reached several conclusions about economic growth. Which of the following is not one of these conclusions? * a) A relatively simple way to increase growth rates permanently is to increase a country's saving rate. b) Growth is generally inhibited rather than promoted by policies like protective tariffs. c) Well-established property rights that are enforced by fair and efficient courts are important to economic growth. d) Countries with few domestic natural resources still have opportunities for economic growth. 6. Arlo is offered a job in Des Moines, where the CPI is 80, and a job in New York, where the CPI is 125. Arlo's job offer in Des Moines is for $42,000. How much does the New York job have to pay in order for the two salaries to represent the same purchasing power? a)
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This note was uploaded on 08/02/2011 for the course ECON 252 taught by Professor Robertholand during the Spring '08 term at Purdue University-West Lafayette.

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Spring_2010_-_Exam_1_BLUE_M5 - C A Guns Butter B 1. D In...

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