Practice_Midterm_Exams-F05

Practice_Midterm_Exams-F05 - Practice Midterm Exams Midterm...

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Practice Midterm Exams Midterm Exam—Econ 201A Winter 2005 Total Points: 50 Each multiple choice question is worth 2 points 1. The productivity growth in the U.S. surged in the late 1990s a. As the level of economic activity slowed down and some in the labor force were unemployed b. As the level of economic activity slowed down but labor was fully employed c. As the level of economic activity was growing and labor was fully employed d. None of the above 2. In an economy productivity of labor has increased by 2% even though the level of employment has fallen by 1% during the same period. You would expect the level of economic activity to a. rise by 1% b. rise by 3% c. fall by 1% d. fall by 3% 3. Robinson Crusoe can either catch 3 fish or sew 1 fishing net in one hour. In a 10 hour work day, his PPF is a. 1/3* Fish + 1 * Net = 10 b. 3*Fish + 1/3 * Net = 30 c. 3*Fish + 1 * Net = 10 Questions 4-7 pertain to the following scenario: The economy of Racer produces 2 goods: cars and robots. Cars are considered consumption goods while robots are investment goods. There are 150 workers in this economy. It takes a worker 1 year to produce a car or 2 years to produce a robot. Currently, 100 workers produce cars and the rest produce robots. The price of a car is $10K and that of a robot is $20K. Each worker is paid $8000 in wages in a year. Government in this economy buys 20 cars. 4. The value of consumption, investment and government expenditures are: a. C = $100K, I = $500K, G = $20K b. C = $800K, I = $1000K, G = $200K c. C = $1000K, I = $500K, G = $200K d. C = $800K, I = $500K, G = $200K 5. Suppose all the profits of firms are distributed to households (HHs). The government taxes the income of the HHS at 10%. The budget of the government (value of T-G) is: a. $50K b. - $50K c. $150K d. -$150K 6. Again suppose all the profits of firms are distributed to HHS and the government taxes the income of HHs at 10%. The aggregate level of savings in this economy is: a. $150K b. $200K
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c. $500K d. Can not be determined from the information given 7. Now let’s add an international trade sector to this economy. Suppose the economy of Racer exports 10 of its cars and imports 15 cars form abroad (each car is valued at $10K). in this case, the aggregate level of savings in this economy is: a. $50K b. $150K c. $200K d. $500K e. Can not be determined from the information given 8. An excerpt from an article in the WSJ, Jan 26, 2005 reads, “China's trade surplus jumped to
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This note was uploaded on 04/07/2008 for the course ECON 201 taught by Professor Salehie during the Spring '08 term at University of Washington.

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Practice_Midterm_Exams-F05 - Practice Midterm Exams Midterm...

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