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(ECON215)bc1f59 - PracticeMidtermAK.pdf
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Economics 215
Intermediate Macroeconomics
Sample Midterm 2005
Multiple Choice (6 points each)
1.
In 1950, a country begins with real (constant dollar) GDP per capita of $2,000. The average growth rate of real GDP is 14% and the population growth rate is 7%. In what year, will GDP per capita be equal to $16,000?
a.
1960
b.
1970
c.
1990
d.
2010
_______C______
2.
An economy progresses from its transition phase to its balanced growth phase. In general
a.
the productivity of capital is greater during the transition phase than the balanced growth phase while the growth rate of labor productivity is greater during the transition phase than the balanced growth phase.
b.
the productivity of capital is less during the transition phase than the balanced growth phase while the growth rate of labor productivity is greater during the transition phase than the balanced growth phase.
c.
the productivity of capital is greater during the transition phase than the balanced growth phase while the growth rate of labor productivity is less during the transition phase than the balanced growth phase.
d.
the productivity of capital is less during the transition phase than the balanced growth phase while the growth rate of labor productivity is less during the transition phase than the balanced growth phase
_____A________
3.
We observe a pattern that developing economies experience real exchange rate appreciations as they grow. Assuming uncovered interest parity is true in the long run, we should see that for developing economies with fixed exchange rates.
a.
PPP-converted GDP grows faster than exchange rate-converted GDP and inflation will be lower than in the USA.
b.
PPP-converted GDP grows faster than exchange rate-converted GDP and inflation will be higher than in the USA.
c.
PPP-converted GDP grows slower than exchange rate-converted GDP and inflation will be lower than in the USA.
d.
PPP-converted GDP grows slower than exchange rate-converted GDP and inflation will be higher than in the USA.
______D_______
4.
Nominal GDP in year 2000 was HK$1.288 Trillion; nominal GDP in 2001 was HK$1.278 trillion. Real GDP in 2001 was HK$1.297 Trillion (measured in year 2000 dollars). If we measure nominal prices with the GDP deflator, we can say that:
a.
The inflation rate in year 2001 is positive and the ex post real interest rate of year 2000 is greater than the nominal interest rate in year 2000.
b.
The inflation rate is year 2001 is negative and the ex post real interest rate of year 2000 is greater than the nominal interest rate in year 2000.
c.
The inflation rate in year 2001 is positive and the ex post real interest rate of year 2000 is less than the nominal interest rate in year 2000.
d.
The inflation rate is year 2001 is negative and the ex post real interest rate of