PSU ECON 104 EVALUATION UPDATED QUESTIONS AND
ANSWERS SURE A+
✔✔The Solow model focuses on the accumulation of ___________, whereas the
Romer's endogenous growth model focuses on the accumulation of ____________. -
✔✔NOT machines; labor
✔✔Which of the following government provisions would not help increase the
accumulation of knowledge capital? - ✔✔tax breaks for consumption
✔✔Firms free ride on the research and development of other firms when they - ✔✔use
knowledge other firms have developed without paying for that knowledge.
✔✔Ideas are - ✔✔nonrival
✔✔Based on the "catch-up line" we developed in this class, poorer countries are more
likely to be at a point ________, where growth in GDP is relatively ________, while
richer countries are more likely to be at a point like ________, where growth in GDP is
relatively ________. - ✔✔up and to the left; high; down and to the right; low
✔✔Which of the following policies would not help promote economic growth? - ✔✔a law
requiring that the funds in an individual retirement account be taxed
✔✔Not enforcing property rights in an economy will - ✔✔lower the level of investment.
✔✔If the economy is at point C, what will happen? - ✔✔NOT Inventories have risen
above their desired level, and firms increase production.
✔✔________ in taxes will decrease consumption spending, and ________ in transfer
payments will increase consumption spending. - ✔✔NOT An increase; a decrease
✔✔The spending multiplier is calculated as the change in ________ divided by the
change in ________. - ✔✔real GDP; autonomous expenditure
✔✔The GDP per-capita increased from $25,013 in 2016 to $27,855 in 2017 for a
fictitious country named Pamopolis. What was the growth rate in 2017? Enter
percentage and round to 2 decimal places. Do not include the percent sign. For
example, if your answer is 5.347% you would enter 5.35. - ✔✔11.36
✔✔The fictitious country of Pamopolis saw its GDP per-capita increase from $620 in
1875 to $3,741 in 1918. What was the average annual growth rate over this time? Enter
percentage and round to 2 decimal places. Do not include the percent sign. For
example, if your answer is 5.347% you would enter 5.35. - ✔✔72.58
, ✔✔The fictitious country of Pamopolis is expected to have an average annual growth
rate of GDP per-capita of 3% for the foreseeable future. How many years will it take
Pamopolis's GDP per-capita to double? Please round to 2 decimal places. - ✔✔23.33
✔✔You're given the following two equations representing the market for loanable funds:
QL = 20 + 2.1r
QL = 77.1 - 2.6r
What is the equilibrium real interest rate? Please round to 2 decimal places and do not
include any percentage sign. - ✔✔12.15
✔✔You're given the following two equations representing the market for loanable funds:
QL = 12.6 + 3.2r
QL = 61.9 - 2.1r
What is the equilibrium quantity of loanable funds? Please round to 1 decimal place. -
✔✔X
✔✔You're given the following two equations representing the market for loanable funds:
QL = 20 + 3.8r
QL = 84.7 - 2.4r
What is the vertical-intercept value? Please round to 1 decimal place. - ✔✔X
✔✔You're given the following two equations representing the market for loanable funds:
QL = 15.1 + 3.4r
QL = 69 - 3.7r
What is the horizontal-intercept value? Please round to 2 decimal places. - ✔✔X
✔✔Using the following data, calculate public savings for a closed economy. Please
round to 1 decimal place. Remember, negative numbers are OK for public savings.
Y = 13.2
C = 6.2
I = 1.9
TR = 1.3
T = 2.4 - ✔✔X
✔✔Using the following data, calculate government purchases for a closed economy.
Please round to 1 decimal place.
Y = 12.9
C = 6.9
I = 2.1
TR = 0.8
T = 2.7 - ✔✔X
ANSWERS SURE A+
✔✔The Solow model focuses on the accumulation of ___________, whereas the
Romer's endogenous growth model focuses on the accumulation of ____________. -
✔✔NOT machines; labor
✔✔Which of the following government provisions would not help increase the
accumulation of knowledge capital? - ✔✔tax breaks for consumption
✔✔Firms free ride on the research and development of other firms when they - ✔✔use
knowledge other firms have developed without paying for that knowledge.
✔✔Ideas are - ✔✔nonrival
✔✔Based on the "catch-up line" we developed in this class, poorer countries are more
likely to be at a point ________, where growth in GDP is relatively ________, while
richer countries are more likely to be at a point like ________, where growth in GDP is
relatively ________. - ✔✔up and to the left; high; down and to the right; low
✔✔Which of the following policies would not help promote economic growth? - ✔✔a law
requiring that the funds in an individual retirement account be taxed
✔✔Not enforcing property rights in an economy will - ✔✔lower the level of investment.
✔✔If the economy is at point C, what will happen? - ✔✔NOT Inventories have risen
above their desired level, and firms increase production.
✔✔________ in taxes will decrease consumption spending, and ________ in transfer
payments will increase consumption spending. - ✔✔NOT An increase; a decrease
✔✔The spending multiplier is calculated as the change in ________ divided by the
change in ________. - ✔✔real GDP; autonomous expenditure
✔✔The GDP per-capita increased from $25,013 in 2016 to $27,855 in 2017 for a
fictitious country named Pamopolis. What was the growth rate in 2017? Enter
percentage and round to 2 decimal places. Do not include the percent sign. For
example, if your answer is 5.347% you would enter 5.35. - ✔✔11.36
✔✔The fictitious country of Pamopolis saw its GDP per-capita increase from $620 in
1875 to $3,741 in 1918. What was the average annual growth rate over this time? Enter
percentage and round to 2 decimal places. Do not include the percent sign. For
example, if your answer is 5.347% you would enter 5.35. - ✔✔72.58
, ✔✔The fictitious country of Pamopolis is expected to have an average annual growth
rate of GDP per-capita of 3% for the foreseeable future. How many years will it take
Pamopolis's GDP per-capita to double? Please round to 2 decimal places. - ✔✔23.33
✔✔You're given the following two equations representing the market for loanable funds:
QL = 20 + 2.1r
QL = 77.1 - 2.6r
What is the equilibrium real interest rate? Please round to 2 decimal places and do not
include any percentage sign. - ✔✔12.15
✔✔You're given the following two equations representing the market for loanable funds:
QL = 12.6 + 3.2r
QL = 61.9 - 2.1r
What is the equilibrium quantity of loanable funds? Please round to 1 decimal place. -
✔✔X
✔✔You're given the following two equations representing the market for loanable funds:
QL = 20 + 3.8r
QL = 84.7 - 2.4r
What is the vertical-intercept value? Please round to 1 decimal place. - ✔✔X
✔✔You're given the following two equations representing the market for loanable funds:
QL = 15.1 + 3.4r
QL = 69 - 3.7r
What is the horizontal-intercept value? Please round to 2 decimal places. - ✔✔X
✔✔Using the following data, calculate public savings for a closed economy. Please
round to 1 decimal place. Remember, negative numbers are OK for public savings.
Y = 13.2
C = 6.2
I = 1.9
TR = 1.3
T = 2.4 - ✔✔X
✔✔Using the following data, calculate government purchases for a closed economy.
Please round to 1 decimal place.
Y = 12.9
C = 6.9
I = 2.1
TR = 0.8
T = 2.7 - ✔✔X
