This is a example of what can be expected
4/26/2021 Dylan Evenfield's Quiz History: Midterm https://canvas.ucsc.edu/courses/39057/quizzes/42727/history?quiz_submission_id=2206501 1/19 Midterm Results for Dylan Evenfield Score for this quiz: 102.5 out of 100 Submitted Feb 4 at 4:52pm This attempt took 91 minutes. 2 / 2 ptsQuestion 1 In the table below, which method is used to calculate GDP? The Expenditure Approach The Chain Weighting Approach The Production Approach The Income Approach Correct!Correct! Additional Comments: 2 / 2 ptsQuestion 2 4/26/2021 Dylan Evenfield's Quiz History: Midterm https://canvas.ucsc.edu/courses/39057/quizzes/42727/history?quiz_submission_id=2206501 2/19 Answer 1: Answer 2: The marginal productivity of labor is [ Select ] , while the marginal productivity of capital is [ Select ] . increasing in capital Correct!Correct! decreasing in capital Correct!Correct! Additional Comments: 2 / 2 ptsQuestion 3 The largest component of GDP is: net operating profits labor share investment consumption Correct!Correct! 4/26/2021 Dylan Evenfield's Quiz History: Midterm https://canvas.ucsc.edu/courses/39057/quizzes/42727/history?quiz_submission_id=2206501 3/19 Additional Comments: 2 / 2 ptsQuestion 4 Consider Table 2.1. The government spending’s share of total GDP in 2015 was about ________ percent. 4 18 Correct!Correct! 23 4/26/2021 Dylan Evenfield's Quiz History: Midterm https://canvas.ucsc.edu/courses/39057/quizzes/42727/history?quiz_submission_id=2206501 4/19 26 Additional Comments: 2 / 2 ptsQuestion 5 Differences in capital per capita across countries can explain MOST of the differences in GDP per capita. True False Correct!Correct! Additional Comments: 2 / 2 ptsQuestion 6 The production function model helps in explaining the differences in GDP per capita across countries: It predicts that countries with MORE capital per capita have MORE GDP per capita and this is what we observe in the data. 4/26/2021 Dylan Evenfield's Quiz History: Midterm https://canvas.ucsc.edu/courses/39057/quizzes/42727/history?quiz_submission_id=2206501 5/19 True Correct!Correct! False Additional Comments: 2 / 2 ptsQuestion 7 What is the real GDP in the year 2019, using 2018 as the base year? 915 825 Correct!Correct! 1000 960 4/26/2021 Dylan Evenfield's Quiz History: Midterm https://canvas.ucsc.edu/courses/39057/quizzes/42727/history?quiz_submission_id=2206501 6/19 Additional Comments: 3 / 3 ptsQuestion 8 The Solow model predicts that a way to help a country develop in the long-run is to transfer them resources so that they can increase their capital level. Thus, by transferring physical capital to poor countries (e.g. Kenya), they can increase in the long-run their output to levels similar to the U.S. Is this statement true or false? True False Correct!Correct! Additional Comments: 3 / 3 ptsQuestion 9 The Ford Motor Company makes a car in 2018 and sells it to the Jones family in 2020. This event increases________. consumption in 2018. 4/26/2021 Dylan Evenfield's Quiz History: Midterm https://canvas.ucsc.edu/courses/39057/quizzes/42727/history?quiz_submission_id=2206501 7/19 consumption in 2018 and GDP in 2020. consumption in 2020 and GDP in 2018. Correct!Correct! both consumption and GDP in 2020. Investment in 2020 Additional Comments: 3 / 3 ptsQuestion 10 Answer 1: Answer 2: Answer 3: [ Select ] GDP measures the value of the economy’s output at current prices. Capital is a stock variable, while investment is a [ Select ] variable. When prices of goods change rapidly, the preferred method to compute real GDP is by [ Select ] . Nominal Correct!Correct! stock Correct!Correct! 4/26/2021 Dylan Evenfield's Quiz History: Midterm https://canvas.ucsc.edu/courses/39057/quizzes/42727/history?quiz_submission_id=2206501 8/19 Answer 4: flow Correct!Correct! using chain weighting Correct!Correct! Additional Comments: 3 / 3 ptsQuestion 11 The Solow model predicts that: If a country receives foreign aid that increases its capital stock, then Consumption would increase in the short run, but not in the long run Correct!Correct! Investment would increase in the short-run and in the long-run. Aggregate consumption would increase both in the short and long run. In the short-run, Aggregate output would increase but output per-capita would be unchanged Additional Comments: 4/26/2021 Dylan Evenfield's Quiz History: Midterm https://canvas.ucsc.edu/courses/39057/quizzes/42727/history?quiz_submission_id=2206501 9/19 3 / 3 ptsQuestion 12 Answer 1: Suppose a country produces oranges and cars. The following table presents the information about the production of oranges and cars. However, there is no information about prices. 2010 2011 Quantity of oranges 5000 5500 Quantity of cars 10 15 Price of oranges (no info) (no info) Price of cars (no info) (no info) Still, we know that the nominal GDP in 2010 was $100,000, from which $90,000 corresponded to the production of oranges and $10,000 to the production of cars. Then, the growth rate of real GDP must be closer to closer to 10% closer to 10% Correct!Correct! Additional Comments: 2 / 3 ptsQuestion 13 4/26/2021 Dylan Evenfield's Quiz History: Midterm https://canvas.ucsc.edu/courses/39057/quizzes/42727/history?quiz_submission_id=2206501 10/19 Answer 1: Answer 2: Answer 3: According to the Solow model, if an economy increases its saving rate, then in the new steady state (compared with the old one), capital will be [ Select ] , capital per capita will be unchanged , and the marginal product of labor will be [ Select ] . higher Correct!Correct! higher orrect Answerorrect Answer unchanged ou Answeredou Answered higher Correct!Correct! Additional Comments: -- / 3 ptsQuestion 14 Explain, why is that economists use the parameter as the standard value in their models? Use the production function model to support your answer. 4/26/2021 Dylan Evenfield's Quiz History: Midterm https://canvas.ucsc.edu/courses/39057/quizzes/42727/history?quiz_submission_id=2206501 11/19 Your Answer: Economists use alpha equal to one third because the production function uses both capital and labor in relation to each other. Capital is generally one-third of GDP meaning that labor will be two-thirds of GDP and throughout the economy, this is generally the case so economists use this as a parameter because it is usually around that value. Additional Comments: 3 / 3 ptsQuestion 15 Assume . Suppose an economy begins in its steady-state. By what proportion does per capita GDP change in the long run in response to each of the following change: saving rate increases by 10%. 15% 10% 0% 5% Correct!Correct! 4/26/2021 Dylan Evenfield's Quiz History: Midterm https://canvas.ucsc.edu/courses/39057/quizzes/42727/history?quiz_submission_id=2206501 12/19 Additional Comments: 3 / 3 ptsQuestion 16 Assume . By what proportion does AGGREGATE GDP change in the SHORT- RUN in response to each of the following change: An earthquake destroys 10% of the capital stock Note: Short-run refers to the same period of the shock. -15% -10% 0% -3.3% Correct!Correct! Additional Comments: 4/26/2021 Dylan Evenfield's Quiz History: Midterm https://canvas.ucsc.edu/courses/39057/quizzes/42727/history?quiz_submission_id=2206501 13/19 -- / 4 ptsQuestion 17 Your Answer: Looking at the following graph presenting data for different countries, would you say that the data supports the predictions of the Solow Model? Explain your answer. For the world as a whole, this does not hold up on average as countries are poor because they have a lower TFP due to technology or other parameters that affect their lower steady-state compared to higher developed countries. Additional Comments: 4/26/2021 Dylan Evenfield's Quiz History: Midterm https://canvas.ucsc.edu/courses/39057/quizzes/42727/history?quiz_submission_id=2206501 14/19 -- / 4 ptsQuestion 18 Your Answer: Looking at the following graph presenting data for different countries, would you say that the data supports the predictions of the Solow Model? Explain your answer. For OECD countries transition dynamics hold up. Because of the catch-up phenomena where poor countries grew quicker than richer countries. Additional Comments: 4/26/2021 Dylan Evenfield's Quiz History: Midterm https://canvas.ucsc.edu/courses/39057/quizzes/42727/history?quiz_submission_id=2206501 15/19 4 / 4 ptsQuestion 19 Using production function with and using information from the table below: What will be the wages of labor in the US relative to the wage in Kenya? [Notice that the questions asks for: ] 13.5 0.03 1 17.4 Correct!Correct! 0.75 we need more information Additional Comments: -- / 20 ptsQuestion 20 4/26/2021 Dylan Evenfield's Quiz History: Midterm https://canvas.ucsc.edu/courses/39057/quizzes/42727/history?quiz_submission_id=2206501 16/19 Consider an economy that follows dynamics as in the Solow model developed in class, with constant population . Suppose a country implements a set of policies that produce an INCREASE in the saving rate . A) (2 points) Explain what kind of policy would generate such effect in the parameter ? (give a real-life example). Suppose that the country begins in steady-state (t=0). Assume that the change in the parameter occurs at period 3 (t=3) and that this effect is permanent. Answer the following: B) (10 points) Analyze this change using a Solow diagram. What happens to the economy over time? Here, I want you to show the Investment and Depreciation curve, before and after the shock. C) (4 points) What will happen to output in the short-run (at t=3)? What will happen in the long-run? C) (4 points) What will happen to consumption in the short-run (at t=3)? What will happen in the long-run? question 20.pdf (https://canvas.ucsc.edu/files/3434917/download) Additional Comments: -- / 10 ptsQuestion 21 https://canvas.ucsc.edu/files/3434917/download 4/26/2021 Dylan Evenfield's Quiz History: Midterm https://canvas.ucsc.edu/courses/39057/quizzes/42727/history?quiz_submission_id=2206501 17/19 The empirical fit of the production model The table below reports per capita GDP and capital per person in the year 2014 for some countries. Your task is to fill in the missing columns of the table. A) (2 points) Given the values in columns 1 and 2, fill in columns 3 and 4. That is, compute per capita GDP and capital per person relative to the U.S. values. B) (3 points) In column 5, use the production model (with a capital exponent of 1/3) to compute predicted per capita GDP for each country relative to the United States, assuming there are no TFP differences. C) (3 points) In column 6, compute the implied level of TFP. D) (2 points) Why do you think the implied level for TFP is lower/bigger than one? In 2014 dollars Relative to the U.S. values (U.S. = 1 (1) Capital per person (2) Per capita GDP (3) Capital per person (4) Per capita GDP (5) predicted (6) Im to United States 141,841 51,958 1 1 1 1 Kenya 5,000 2,500 ? ? ? ? Question 21.pdf (https://canvas.ucsc.edu/files/3434919/download) https://canvas.ucsc.edu/files/3434919/download 4/26/2021 Dylan Evenfield's Quiz History: Midterm https://canvas.ucsc.edu/courses/39057/quizzes/42727/history?quiz_submission_id=2206501 18/19 Additional Comments: -- / 17 ptsQuestion 22 A simple economy. Consider an economy with three domestic agents: Ann, Bill, and Carl. And a foreign economy represented by the agent Fernando. Ann owns a firm that produces wood. Bill owns a firm that buys wood and builds tables. Bill hires Carl to help him produce the tables. There is no government. During the year, the following transactions happened: Ann produced and sold 500 pounds of wood at a price of $10/pound. Ann sold 400 pounds to Bill's firm. And, she sold