1. Chapter 1.
o Table 1-1: Product Market Growth Matrix
o Value equation=benefit/price
o Table 1-3: Think Locally, Act Globally
Taking a strategy that worked in one place and trying it all over the world
o Management Orientations
Polycentric- each count

Consider the following Cobb-Douglass production function:
Y = 60K1/3L2/3
a) Complete the following:
K
L
Y
64
8
60*641/3*82/3 =60*4*4=960
128
16
60*1281/3*162/3 =60*5.0397*6.3496=1,920
192
24
60*1921/3*242/3 =60*5.7690*8.3203=2,880
b) Derive the algebraic

Chapter 7 Question 1
Countries A and B both have the production function Y = F(K,L) = K1/2L1/2
a) Does this function have constant returns to scale? Explain.
A constant return to scale occurs when an increase in all factors of production causes
output to

GECN 500
EXAM 1 REVIEW
1. In a small open economy, if the world real interest rate is above the rate at which national
saving exceeds domestic investment, then there will be a trade _ and _ net capital
outflow.
A) surplus; negative
B) deficit; positive
C)

Fa15 Exam 3 Review
1. The interaction of the IS curve and the LM curve together determine:
A) the price level and the inflation rate.
B) the interest rate and the price level.
C) investment and the money supply.
D) the interest rate and the level of outpu

Fa15 Exam 3 Review
1. The interaction of the IS curve and the LM curve together determine:
A) the price level and the inflation rate.
B) the interest rate and the price level.
C) investment and the money supply.
D) the interest rate and the level of outpu

3) Suppose that an economys production function is Cobb-Douglas with parameter
=0.3.
a) What fractions of income do capital and labor receive? Capital () 30%, Labor
(1- ) 70%
b) Suppose immigration raises the labor force by 10%. What happens to the total

If the fraction of employed workers who lose their jobs each month (the rate of job
separation) is 0.01 and the fraction of the unemployed who find a job each month
is 0.09 (the rate of job findings), then the natural rate of unemployment is:
U/L = s/(s+f

In the Keynesian cross, assume that the consumption function is given by
C = 200 + 0.75 (Y T).
Planned investment is 100; government purchases and taxes are both 100.
a) Graph planned expenditure as a function of income
E = C(Y-T) + I + G;
E = 200 + 0.75