Econ 305 Midterm
ECON 305 MIDTERM
A. Multiple choices
1. __________ Given that air pollution is generated as a byproduct of the production of some goods like chemicals A) GDP is adjusted downward to account for this B) GDP is adjusted upward to account for this. C) GDP tends to understate economic welfare. D) GDP tends to overstate economic welfare. E) None of the above.
2. __________ Suppose hamburgers cost $1.20 last year and $1.32 this year, and the overall price index (the GDP deflator) rose from 110 last year to 120 this year.
How much will 1000 hamburgers contribute to this year's real GDP? A) $1000. B) $1100. C) $1200. D) $1320. E) Impossible to calculate without additional information.
3. In the very long run we assume that A) prices are …show more content…
According to the quantity equation A) V =PM / T B) V = MT / P C) V = PT / M D) V = 1 / PTM E) none of the above
8. Which of the following is NOT a source of economic growth? A) growth in consumption expenditures B) growth in labor inputs C) growth in capital inputs D) improved technological efficiency E) growth in the stock of knowledge
9. Assume a production function with constant returns to scale, labor's share of income at 0.7, and capital's share at 0.3. If labor grows at 4% and capital grows at 3%, how many years would it take to double the current level of output if no technological advances are made? A) 7 B) 10 C) 19 D) 23 E) 33
10. In general A) a country that has a balance of payments deficit will have an increase in foreign reserves B) a country that has a balance of payments surplus will have a decrease in foreign reserves C) a country that has a balance of payments deficit will have a reduction in foreign reserves D) a country that has a balance of payments surplus will have an increase in foreign reserves E) both C) and D) are correct
11. The theory of purchasing power parity states
A. Multiple choices
1. __________ Given that air pollution is generated as a byproduct of the production of some goods like chemicals A) GDP is adjusted downward to account for this B) GDP is adjusted upward to account for this. C) GDP tends to understate economic welfare. D) GDP tends to overstate economic welfare. E) None of the above.
2. __________ Suppose hamburgers cost $1.20 last year and $1.32 this year, and the overall price index (the GDP deflator) rose from 110 last year to 120 this year.
How much will 1000 hamburgers contribute to this year's real GDP? A) $1000. B) $1100. C) $1200. D) $1320. E) Impossible to calculate without additional information.
3. In the very long run we assume that A) prices are …show more content…
According to the quantity equation A) V =PM / T B) V = MT / P C) V = PT / M D) V = 1 / PTM E) none of the above
8. Which of the following is NOT a source of economic growth? A) growth in consumption expenditures B) growth in labor inputs C) growth in capital inputs D) improved technological efficiency E) growth in the stock of knowledge
9. Assume a production function with constant returns to scale, labor's share of income at 0.7, and capital's share at 0.3. If labor grows at 4% and capital grows at 3%, how many years would it take to double the current level of output if no technological advances are made? A) 7 B) 10 C) 19 D) 23 E) 33
10. In general A) a country that has a balance of payments deficit will have an increase in foreign reserves B) a country that has a balance of payments surplus will have a decrease in foreign reserves C) a country that has a balance of payments deficit will have a reduction in foreign reserves D) a country that has a balance of payments surplus will have an increase in foreign reserves E) both C) and D) are correct
11. The theory of purchasing power parity states