Econ 1a exam study guide 1 Foldvary

1) The closed-economy macroeconomic equation Y - C - G = I tells us

2. How do we compare real GDP among different years?

3. When you pay taxes to government, is that tax payment in GDP?

4. A higher savings rate (portion of income saved) reduces interest rates and does what to investment and growth?

5. Which of the following transactions is included in the US GDP?

6) Which of the following is not counted in GDP?

7)         2007                                   2008

                           Quantity         Price Quantity            Price

Snacks X $2 Y $3.50

Candy Z $1 W $2

For this data, calculate real GDP for the year 2007. The base year is 2008.

8) Why would a person be unemployed for many years?

9) In a pure free market, interest rates mainly originate in

10) The largest spending component of GDP is

11)      GDP includes all of the following except:

12)      What can cause deflation to be good for an economy

13) Much of the oil consumed in the United States is imported. When the prices of oil rises and the price of other goods do not fall:

14) Which of the following is not counted in the government spending portion of GDP?

15) 1. Suppose that an apartment complex built years ago converts to a condominium, where the renters are now owners of their former apartments. Are the rental and purchase in GDP?

16) In the Solow growth model, if the savings rate is .X; the per-worker GDP equals the per-worker stock of capital goods, the depreciation rate of capital goods is .Y, and capital goods per worker in year 1 equals Z, then what will be the amount of capital goods in year 2?

17).     In the Solow model of economic growth, as the amount of capital goods increases,

The marginal product of capital goods declines does what, while the depreciation rate does what.

18) For the whole economy, generally, what is the relationship beween income and spending?

19. Aunt Poson says, “it will be better for this year’s GDP if you spend your income for consumption, rather than save it.” Is she right?

20) A dentist exchanges dental work for carpentry work. It that in GDP?

21) In a market economy, the most important function of the rate of interest is to

22) If the GDP of Prchku is continuously shrinking at a rate of five percent per year, how long will it take for the economy to be half its former size?

23) According to research on economic freedom, if we compare economies that grow rapidly with those which don’t grow, the main difference is

24) A problem with GDP, gross domestic product, which makes it incomplete or in error, is that

25) Explain why, during the gold rush in California, wages first rose to a very high level, and then declined to the same level as before the gold rush.