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econ 410 homework1

econ 410 homework1 - Homework 1 Spring 2011 ECON 410...

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Homework 1 Spring 2011 ECON 410 Professor Li Gan Macroeconomic Theory Due 2/1/2011 (Tuesday) (A) Multiple Choice Questions: (3 points per multiple choice problem) 25 questions. Please use scantron to answer multiple choice problems. 1. Macroeconomics does not try to answer the question of: A) why do some countries experience rapid growth. B) what is the rate of return on education. C) why do some countries have high rates of inflation. D) what causes recessions and depressions. 2. All of the following are important macroeconomic variables except : 3. A typical trend during a recession is that 4. Macroeconomists cannot conduct controlled experiments such as testing various tax and expenditure policies, because A) It is against the law B) They tried once and it did not work C) The experiments would cost too much D) Economists already know the answers that would come out of the experiments 5. Assume that apples cost \$0.50 in 2002 and \$1 in 2007, whereas oranges cost \$1 in 2002 and \$1.50 in 2007. If 4 apples were produced in 2002 and 5 in 2007, whereas 3 oranges were produced in 2002 and 5 in 2007, then the GDP of 2007, using a base year of 2002, is: 6. Real GDP______ over time and the growth rate of real GDP _____. A) grows; fluctuates B) is steady; is steady C) grows; is steady D) is steady; fluctuates Page 1

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7. In a simple graphical model of the supply and demand for pizza with the price of pizza measured vertically and the quantity of pizza measured horizontally:
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