Econ_199_Aut_05_Exam_4 - Introduction to Macroeconomics...

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Introduction to Macroeconomics Allen R. Sanderson Economics 19900 Autumn 2005 FOURTH/FINAL EXAMINATION Name (Please Print): ______________________________________ [41 Points Possible] Part I. Multiple Choice. Circle letter corresponding to your answer. One point each; 21 points total. 1. Robert Solow’s “one-third rule” pertains to: a. the relationship between changes in the capital stock and subsequent changes in real GDP. b. the ratio of merchandise exports to service exports if a country wants to balance its accounts. c. the ideal percentage of a country’s gross income that should be saved for optimal growth. d. how much of a rise in the price level can subsequently lower the unemployment rate. e. attributing overall growth to productivity, population and technology (i.e., 1/3 for each). 2. The main reason countries restrict international trade is: a. for the tariff revenue it provides. b. rent-seeking on the part of political and special-interest groups. c. to prevent rich nations from exploiting poor countries. d. because of national security concerns. e. to increase the overall number of jobs in an economy. 3. Suppose for #2 above I had limited the scope of the question to developing (or underdeveloped or less-developed countries). What alternative answer could be justified? a. A b. B c. C d. D e. E 4. The quantity of goods and services that a country exports to pay for its imports is called: a. its comparative advantage. b. the exchange rate. c. its gains from trade. d. purchasing power parity. e. its terms of trade. 5. The long-run Phillips curve: a. is vertical at the natural rate of unemployment. b. shifts downward with a decrease in the expected rate of inflation. c. is independent of the natural rate of unemployment. d. has shifted upward steadily in the U.S. over the last 40 years. e. has the same shape as the short-run Phillips curve. 6. Which is the most optimistic growth theory in terms of long-term potential, equity and the role of population? a. Classical Growth Theory b. Malthusian Growth Theory c. Marxian Growth Theory d. Neoclassical Growth Theory e. New Growth Theory 7. The main reason it is possible for the U.S. to compete against cheap foreign labor is because: a. we subsidize our workers directly and indirectly (through tariffs to equalize wage rates). b.
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This test prep was uploaded on 04/07/2008 for the course ECON 199 taught by Professor Sanderson during the Fall '07 term at UChicago.

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Econ_199_Aut_05_Exam_4 - Introduction to Macroeconomics...

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