1. What is the national spending identity?
a. Y= C+I-G+X-M
b. Y= C+I+G+X-M
c. Y= wages+ profits+rent+ interest rates
d. None of the above
2. What defines the "rules of the game" that structure economic incentives?
a. Institutions
b. Written laws exclusively
c. Lawyers
d. Sovereign authority
3. Using the Solow Model, suppose the initial depreciation is 0.02 and it increases to 0.10. You would expect the level of steady state capital and output to
a. Increase
d. Drop
c. Remain the same
d. None of the above
4. Which of the following does NOT lead to economic growth?
a. Property Rights
b. A dependable legal system
c. Political instability
d. Competitive and open markets
5. The U.S. GDP in 2008 was $14,291.5 billion, and the previous year the GDP was $14,028.7 billion.
What was the rate of growth in GDP from 2007 to 2008?
a. Approximately 1.87%
b. Approximately 3.45%
c. Approximately 2.5%
d. Approximately 3.7%
