Econ 375 Sample Exam 3 Questions 1. Some firms do not instantly adjust the prices they charge in response to changes in demand for all of the following reasons except: A) it is costly to alter prices. B) they do not want to annoy their frequent customers.
Econ 375 Problem Set 4 1. We did this one in class. 2. An increase in the saving rate will raise the steady-state level of income but it will have no effect on the steady-state rate of growth. 3. Consider an economy described by the production function: Y
Problem Set 3 Key
1. This one is straight out of the book.
2. Anticipated vs Unanticipated AD shock.
a) Y = 3000; yes, it is a long run equilibrium since Y = Yn = 3000 and P = EP
b) Y = 3333; P = 166.7
c) P = 200; Y = 3000
3. The economy has the
Econ 375 Problem Set 1 Answers
1. The marriage would reduce GDP since any transaction between the couple would not now pass through a market institution. 2. Included in GDP: GM purchasing tires to replace worn out tires on executives' cars; purchase o
Sample Exam 2
Part I: Multiple Choice.
1. The IS curve plots the relationship between interest rates and _ that arises in the market for _.
a) national income; goods
b) the price level; goods
c) national income; money
d) the price level; money
Econ 375 Exam 1 Part I: Multiple Choice. Each is worth 2 points. 1. a) b) c) d) 2. a) b) c) d) 3. a) b) c) d) 4. a) b) c) d) 5. Macroeconomists study all of the following issues except: the determinants of inflation the relative markets shares of General
Spreadsheet Project 4: Solow Growth Model
Assume that the economy is described by the following production function: Y = K.3L.7
where the initial values of the inputs are K = 25 and L = 5.
Furthermore, assume that the savings rate for this economy is s =
Spreadsheet Project 3: International Phillips Curves
Locate data on unemployment rates and inflation rates for the past 20 years from a country other than the
United States. Create an Excel X-Y chart to display the data. Answer the following questions:
Spreadsheet Project 2: IS-LM Model Building
Use the following equations to build an Excel spreadsheet model of equilibrium in the goods (IS curve)
and money (LM curve) markets.
(M/P)d = Ms/P
C = a + b(Y - T)
(M/P)d = L
Spreadsheet Project 1: Data Presentation and Interpretation
The objective is for each student to obtain and evaluate historical data obtained from one or more
government or other web sites. You should obtain one or more data series (spanning at least a de
Exam 4 Answers 1. 2. 3. 4. 5. 6. 7. D C A A C D Steady-state k* will be the same since s is unaffected.
8. The Golden Rule condition is: MPK = + n + g. Thus, you would need to know the values of each of these parameters. 9. The rate of growth of output pe
Econ 375 Exam 4 Part I: Each question is worth 2 points. 1. a) b) c) d) 2. In the Solow growth model, the economy ends up with a steady-state level of capital: only if it starts from a level of capital below the steady-state level. only if it starts from