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(econ215)[2005](s)mid~PPSpider^_10241.pdf
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Economics 215
Intermediate Macroeconomics
Thursday, March 24, 2005
Midterm Exam


Write all of your final answers on the exam sheet at the place marked. The time of the exam is 9:00AM-10:20AM.

Multiple Choice (5 points each)

1.
Two countries have identical Cobb-Douglas production functions and identical levels and growth rates of technology. Country A has a higher investment rate than country B. Both countries have identical levels of population growth and identical depreciation rates. Along the balanced growth path, we should see that at any point in time,


a.
Country A has a higher level of capital productivity than Country B, and Country B has a higher level of labor productivity than Country A.


b.
Country A has a lower level of capital productivity than Country B, and Country B has a higher level of labor productivity than Country A.


c.
Country A has a higher level of capital productivity than Country B, and Country B has a lower level of labor productivity than Country A.


d.
Country A has a lower level of capital productivity than Country B, and Country B has a lower level of labor productivity than Country A.





Answer _____________

2.
Over the period, 1980-2000, we observed a structural change in the Hong Kong economy. We have seen




a.
an increase in the share of GDP produced in the manufacturing sector and an increase of the share produced in the services sector.


b.
an increase in the share of GDP produced in the manufacturing sector and a decrease of the share produced in the services sector.


c.
a decrease in the share of GDP produced in the manufacturing sector and an increase of the share produced in the services sector.


d.
a decrease in the share of GDP produced in the manufacturing sector and a decrease of the share produced in the services sector.




Answer _____________



3.
Assume that there is a persistent increase in money growth, so inflation increases and expectations of inflation in the future also go up. Assuming the neo-classical dichotomy, we should see:


a.
a faster growth rate of the exchange rate and a higher level of velocity


b.
a faster growth rate of the exchange rate and a lower level of velocity


c.
a slower growth rate of the exchange rate and a higher level of velocity


d.
a slower growth rate of the exchange rate and a lower level of velocity





Answer _____________



4.
Two countries have identical Cobb-Douglas production functions and identical levels and growth rates of technology. Both countries have identical levels of population growth and identical investment rates. Due to poor weather, country A has a higher capital depreciation rate than country B.


a.
Country A will have faster labor productivity growth than Country B at any given lev