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ECO3202 Practice Test #2a

# ECO3202 Practice Test #2a - ECO 3202 Applied Macroeconomics...

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Page 1 ECO 3202 Applied Macroeconomics – Practice Test #2a (See Answer Key in the last page) 1. If the nominal interest rates in the United States and Canada are 8 percent and 12 percent, respectively, the real interest rates are the same, and the real exchange rate is fixed, then the market's expectation about the number of Canadian dollars to be received for a U.S. dollar a year from now will be that it will: A) decrease by 8 percent. B) decrease by 4 percent. C) increase by 4 percent. D) increase by 5 percent. 2. The change in capital stock per worker ( k ) may be expressed as a function of s —the saving ratio, f ( k )—output per worker, k —capital per worker, and δ —the depreciation rate, by the equation: A) k = sf ( k ) / δ k . B) k = sf ( k ) × δ k . C) k = sf ( k ) + δ k . D) k = sf ( k ) – δ k . 3. The Solow growth model describes: 4. The steady-state level of capital occurs when the change in the capital stock ( k ) equals: 5. In the small open economy in equilibrium:

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