ECON2101 Final Exam S1 2011

Topics: Macroeconomics, Inflation, Unemployment Pages: 11 (2251 words) Published: October 7, 2013
UNIVERSITY OF NEW SOUTH WALES
School of Economics
ECON2102
Macroeconomics 2
Final Examination
Semester 1, 2011
1. Time Allowed - 2 hours
2. Reading Time – 10 minutes
3. This examination paper has 10 pages
4. Total number of marks available – 70
5. All questions are not of equal value. Marks available for each question are shown in the examination paper.
6. There are two parts to the exam: Part A and Part B
7. PART A consists of 25 multiple choice questions. All questions from Part A must be answered on the answer sheet provided. Each question in Part A is worth 1 mark. 8. PART B consists of 5 questions. Answer THREE (3) of the five questions in Part B. Each question in Part B is worth 15 marks.

9. Candidates may bring non-programmable calculators to the exam. 10. Answers to Part A multiple choice questions must be coded in pencil. 11. All answers to Part B must be written in ink. In Part B pencils may be used only for drawing, sketching or graphical work.

12. This paper may be retained by the candidate.

Page 1 of 10

PART A: MULTIPLE CHOICE (25 MARKS)
Answer all TWENTY-FIVE (25) multiple choice questions on the answer sheet provided. Select the best option (a, b, c, d or e) for each question. Each question is worth 1 mark.
Question 1
Differences in per-capita output across economies with the same per-capita capital stock can be explained by
(a) differences in labor
(b) differences in total factor productivity
(c) similarities in total factor productivity
(d) differences in physical capital
(e) similarities in physical capital
Question 2
Which of the following does not explain differences in total factor productivity? (a) institutions
(b) the labour force
(c) human capital
(d) natural resources
(e) technology
Question 3
Which of the following production functions exhibits constant returns to scale? (a) 𝑌 = 𝐾 𝛼 𝐿1−𝛼
(b) 𝑌 = 𝐾 1/3 𝐿2/3
(c) 𝑌 = 𝐾 0.1 𝐿0.9
(d) 𝑌 = 𝐾 1/4 𝐿3/4
(e) All of the above

Question 4
The production model for per-capita GDP, 𝑦 = 𝐴̅ 𝑘1/3 with 𝐴̅ = 1 for all countries, tends to:
(a) predict that countries are significantly poorer than they actually are (b) predict that countries are significantly richer than they actually are (c) predict actual per-capita GDP with high accuracy

(d) imply that all differences in per-capita GDP are due to total factor productivity (e) none of the above

Page 2 of 10

Question 5
1/3 2/3
If the production function is given by 𝑌𝑡 = 𝐴̅ 𝐾 𝑡 𝐿 𝑡 , the savings rate, s, is 20 percent, the depreciation rate, 𝑑̅ , is 5 percent, and 𝐴̅ = � = 1, the steady-state level of output in 𝐿
the Solow-Swan model is:
(a) 1
(b) 2
(c) 3
(d) 4
(e) 8
Question 6
Which of the following is non-rival?
(a) a bowl of noodles
(b) an orange
(c) a public bus
(d) a taxi
(e) the quadratic formula
Question 7
Idea accumulation in the Romer model exhibits
(a) increasing returns to capital
(b) diminishing returns in the stock of ideas
(c) negative returns in the stock of ideas
(d) no diminishing returns in the stock of ideas
(e) diminishing returns to labor
Question 8
In the Romer model, the production function 𝑌𝑡 = 𝐴 𝑡 𝐿 𝑦𝑡 , where 𝐴 𝑡 is knowledge and 𝐿 𝑦𝑡 is the amount of labour in the output sector,
(a) exhibits constant returns to labor and increasing returns to labor and knowledge (b) exhibits constant returns to labor and increasing returns to knowledge (c) exhibits increasing returns to labor and constant returns to labor and knowledge (d) exhibits decreasing returns to labor and constant returns to labor and knowledge (e) exhibits increasing returns to labor and increasing returns to labor and knowledge Question 9

In the Romer model, the growth rate of ideas, 𝑔̅ , is increasing in (a) the research share and the total population
(b) the knowledge efficiency parameter and research share
(c) the knowledge efficiency parameter, the research share and the total population (d) the knowledge efficiency parameter and the savings rate
(e)...
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