Econ_199_Win_06_Exam__4 - Introduction to Macroeconomics...

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Introduction to Macroeconomics Allen R. Sanderson Economics 19900 Winter 2006 FOURTH HOUR EXAMINATION Name (Please Print): ________________________________________ [40 Points Possible] Part I. Multiple Choice. Circle letter corresponding to your answer. One point each; 20 points total. 1. Which of the following is correct? a. In terms of annual rates of growth in real GDP per capita, the U.S. has averaged about 5% a year over the 20 th century. b. The U.S. currently has the highest growth rate of any industrialized country. c. Given its size (that is, population), China’s GDP is now about equal to U.S. GDP, and China will overtake us by the end of this decade. d. If capital per hour of labor increases by 3%, real GDP per hour of labor increases by 1%. e. Worldwide, growth in the 18 th and 19 th centuries was on a par with 20 th -century gains. 2. Comparative advantage: a. does have one important caveat: not all countries can gain from exporting and importing; some will win/gain, others will lose. b. implies that countries with an absolute advantage in all goods have no economic incentive to import. c. does not apply to inefficient countries, which cannot import profitably, or high-wage countries, which cannot export profitably. d. says that a country should specialize in goods in which it is a high opportunity cost producer. e. is the fundamental force that drives international trade. 3. According to the New Growth Theory, a. market competition is often no better than government intervention in producing increases in per capita income for a country. b. there are no diminishing returns to education. c. the growth in leisure time is more important than the growth in income. d. technological advances are largely independent of reward or incentive schemes to innovate. e. growth rates across economies will eventually converge and equalize; it just takes time. 4. ___________________ is/are politically popular because benefits are concentrated while its/their costs are widespread. a. Government budget deficits b. Increases in the money supply (that is, inflation) c. Trade barriers d. Interest rate hikes e. A strong dollar 5. The “one-third” rule: a. can be used to show how capital contributes to increases in output. 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_Win_06_Exam__4 - Introduction to Macroeconomics...

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