ECON 1102 Midterm 1 Exam 2025 With Accurate
Solutions
((GDP2 – GDP1) / GDP1) x 100 – Answer GDP growth equation
(nominal GDP / real GDP) x 100 – Answer GDP deflator
20% - Answer Gov spending % of GDP
70 / GDP growth rate = doubling time – Answer Rule of 70 equation
Absolute Advantage – Answer need fewer inputs
Base year GDP – Answer What you need to determine real GDP
Capital – Answer K
Capital and infrastructure through existing ideas – Answer Catching up
economies grow in
Comparative Advantage – Answer lower opportunity cost
Conditional convergence – Answer if countries have similar steady states,
the poorer will grow faster
Consumption goods – Answer C =
Depreciation = investment – Answer steady state capital
, Depreciation rate – Answer 𝛿
Diminishing returns on capital – Answer marginal product of capital gets
smaller as capital increases
Exports – imports – Answer NX =
GDP / population – Answer GDP per capita
Government purchases – Answer G =
High health, more technology, better education, honest governments –
Answer associated with high GDP
Ideas and technology – Answer Cutting edge economies grow in
Interest – Answer I = (FI)
Investment goods – Answer I = (NS)
Investment rate – Answer γ
K = (γ^2 x A^2) / 𝛿^2 – Answer capital equation
K2 = K1 + I1 – D1 – Answer new capital stock value
Leisure, pollution, income distribution – Answer GDP doesn’t measure
MPk – Answer marginal output
Solutions
((GDP2 – GDP1) / GDP1) x 100 – Answer GDP growth equation
(nominal GDP / real GDP) x 100 – Answer GDP deflator
20% - Answer Gov spending % of GDP
70 / GDP growth rate = doubling time – Answer Rule of 70 equation
Absolute Advantage – Answer need fewer inputs
Base year GDP – Answer What you need to determine real GDP
Capital – Answer K
Capital and infrastructure through existing ideas – Answer Catching up
economies grow in
Comparative Advantage – Answer lower opportunity cost
Conditional convergence – Answer if countries have similar steady states,
the poorer will grow faster
Consumption goods – Answer C =
Depreciation = investment – Answer steady state capital
, Depreciation rate – Answer 𝛿
Diminishing returns on capital – Answer marginal product of capital gets
smaller as capital increases
Exports – imports – Answer NX =
GDP / population – Answer GDP per capita
Government purchases – Answer G =
High health, more technology, better education, honest governments –
Answer associated with high GDP
Ideas and technology – Answer Cutting edge economies grow in
Interest – Answer I = (FI)
Investment goods – Answer I = (NS)
Investment rate – Answer γ
K = (γ^2 x A^2) / 𝛿^2 – Answer capital equation
K2 = K1 + I1 – D1 – Answer new capital stock value
Leisure, pollution, income distribution – Answer GDP doesn’t measure
MPk – Answer marginal output
