2105 exam 2 VA - ECON 2105 Exam 2 Chapters 9-11 VERSION A...

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ECON 2105 Exam 2 Chapters 9-11 VERSION A Format: 36 multiple-choice questions Name: __________________________ Date: _10/20/2011____________ 1. If the stock market crashes: A) the aggregate consumption function will shift down. B) unplanned inventory investment will be negative. C) GDP will increase. D) the aggregate consumption function will shift up. 2. The Convergence Hypothesis states that: A) international differences in real GDP per capita tend to fluctuate over time. B) international differences in real GDP per capita tend to narrow over time. C) international differences in real GDP per capita tend to diverge over time. D) international differences in real GDP per capita remain constant over time. Use the following to answer question 3: Figure: Crowding Out Version 1 Page 1
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3. (Figure: Crowding Out) Suppose the supply of loanable funds curve S LF1 shifts to S LF2 , that implies: A) that private savings have decreased. B) that private savings have increased. C) that national savings have decreased. D) that national investment has decreased. Use the following to answer question 4: Table: South Korea Real GDP per Capita 4. (Table: South Korean Real GDP per Capita) As a percentage of its real GDP per capita in 1960, approximately how much did South Korea produce in 2000? A) 1,011% B) 151% C) 10% D) 15% 5. In the open economy of Sildavia, government spending during 2005 was $30 billion, consumption was $70 billion, taxes were $20 billion, and GDP was $100 billion. If investment spending in Sildavia during 2005 was $10 billion, we can conclude that Sildavia registered: A) a trade surplus of $20 billion and a financial deficit of $20 billion. B) a net capital inflow of $10 billion. C) a net capital outflow of $10 billion. D) capital inflows of $10 billion and capital outflows of $20 billion. Version 1 Page 2
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6. Crowding out means: A) there are too many players in the financial markets. B) private savings decreases when the government borrows. C) some bond holders will be squeezed out of the market. D) private investment decreases when the government borrows. 7. Diminishing returns to physical capital implies that, when human capital per worker and the state of technology remain fixed, each successive increase in physical capital leads to: A) a larger increase in productivity. B)
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This note was uploaded on 02/24/2012 for the course ECONOMICS 2105 taught by Professor Belton during the Fall '11 term at Georgia Institute of Technology.

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2105 exam 2 VA - ECON 2105 Exam 2 Chapters 9-11 VERSION A...

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