Midterm exam 1
This is a sealed book examination.
Exam is out of 100 items.
Answer the questions.
Show all of your calculations.
Describe your answers in the essay type queries.
You have 60 minutes to end this examination.
Academic Ethics: In cases of a violation of educational integrity is it doesn't policy with the Department of Economics to impose one of the most severe penalties that are most consistent with University or college guidelines.
1 . (4 points) Typical labor efficiency is the
(a)amount of personnel per machine.
(b)amount of machines per worker.
(c)ratio of applied to jobless workers.
(d)amount of outcome per employee.
2 . (4 points) A country has a operate deficit the moment
(a)imports exceed exports.
(b)imports equal exports.
(c)exports surpass imports.
(d)export is absolutely no.
3. (4 points) Traditional economists believe
(a)the government really should have an active function in the economy. (b)government policies will be ineffective and counterproductive. (c)the government should actively intervene in the economy to reduce business periods. (d)wages and prices don't modify quickly, so the economy is definitely slow to come back to equilibrium. Solution: B
four. (4 points) The country of Old Shirt produces milk and chausser, and it includes published the next macroeconomic data, where volumes are in gallons and costs are us dollars per gallon.
| |2003 | |2004 | |Good |Quantity |Price | |Quantity |Price | |Milk | 500 |$2 | | 900 |$3 | |Butter |2000 |$1 | |3000 |$2
Between the year 2003 and 2005, nominal GROSS DOMESTIC PRODUCT grew simply by
(b)65. five per cent.
5. (4 points) The expected real interest rate (r) is equal to (a)nominal rate of interest minus inflation rate.
(b)nominal interest rate less expected inflation rate. (c)expected nominal interest minus pumpiing rate. (d)nominal interest rate as well as expected inflation rate.
six. (4 points) Your employer wants to know if you should lay off any kind of workers. You answer that you need to lay away workers if the (a)marginal revenue product of labor is definitely greater than the nominal salary rate. (b)marginal product of labor is usually greater than or equal to the true wage rate. (c)marginal income product of labor can be equal to the nominal salary rate. (d)marginal product of labor is no more than the real salary rate. Answer: D
7. (4 points) An adverse oil-price shock decreases labor require. What happens to current employment as well as the real wage rate? (a)Both employment as well as the real wage rate might increase. (b)Both employment and the real wage rate could decrease. (c)Employment would boost and the actual wage will decrease. (d)Employment would lower and the actual wage might increase. Response: B
8. (4 points) A temporary decrease in government purchases would trigger (a)a rightward shift in the saving curve and a leftward switch in the expense curve. (b)a rightward switch in the conserving curve and a rightward shift inside the investment competition. (c)a rightward shift in the saving curve, but simply no shift inside the investment competition. (d)no shift in the keeping curve, yet a leftward shift inside the investment curve. Answer: C
9. (4 points) The consumer cost of capital is given by following solution, where pK is the real price of capital items, d is the depreciation rate, and 3rd there’s r is the predicted real interest. (a)uc ' (r + d)/pK
(b)uc ' pK/(r + d)
(c)uc ' d pK/r
(d)uc ' (r & d)pK