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Multiple Choices 20 points Note At lease one and possibly more than one item is correct

Multiple Choices (20 points) Note: At lease one and possibly more than one item is correct. Please in the parentheses in front of the items that you think are correct. Leave blank the parentheses in front of the items that you think are incorrect. Each item is worth 0.5 point. Depending on the number of items, each question is worth 2-2.5 points. 1. Suppose there are two countries that are identical with the following exception. The saving rate in country A is greater than the saving rate in country B. Given this information, we know that in the long run ( A. the growth rate of capital per worker will be greater in A than in B. B. the level of output per worker will be greater in A than in B. ( C. the capital-labor ratios (K/N) will be greater in A than in B. D. the growth rate of output per worker will be the same in both countries. C 2. Assume that employment increases by 3%. Holding all other factors constant, we know with certainty that which of the following will occur? ( ) A. output will increase by 3% B output per worker will increase by 3% C. output will increase by less than 3% D. the capital labor ratio will decrease ( E. output per worker will remain constant. 3. Assume that the saving rate decreases. We know that this decrease in the saving rate will cause which of the following? ( ) A. a permanent decrease in the level of output per capita B. no permanent change in the level of capital per capita ( C. a temporary decrease in the rate of growth of output per capita D. a permanently lower rate of growth of output per capita 4. Which of the following will cause an increase in output per worker in the long run? ( ) A. an increase in the saving rate ( B. a reduction in the depreciation rate ( C. an increase in the stock of human capital D. an improvement of technology 5. Suppose, due to a military conflict, that a country experiences a large reduction in its capital stock. Assume no other effects of this event on the economy. Which of the following will tend to occur as the economy adjusts to this situation? A. a relatively low growth rate for some time ( B. a relative high growth rate for some time C. zero growth for some time, followed by a gradually increasing growth rate D. positive growth, followed by negative growth, and then zero growth

Feb 01 2020 View more View Less

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