Hi can you please go over these questions. I have answered them already. but some are probably incorrect. can you please check the answers to the multiple choice questions and if you make changes...

PART 3
Question 1
Which of the following will cause a reduction in aggregate output?
Answer

a reduction in N

a reduction in K

a worsening in technology

all of the above
0.25 points
Question 2
If Kt+1/N = Kt/N, we know that:
Answer

saving per worker equals depreciation per worker in period t.

saving per worker is less than depreciation per worker in period t.

saving per worker is greater than depreciation per worker in period t.

the saving rate fell in period t.
0.25 points
Question 3
For this question, assume that expected inflation this year is equal to past year's inflation. Also
assume that the unemployment rate has been equal to the natural rate of unemployment for
some time. Given this information, we know that:
Answer

the rate of inflation should be zero.

the rate of inflation should neither increase nor decrease.

the rate of inflation should steadily increase.

the rate of inflation should steadily decrease.

the natural rate of unemployment should steadily decrease.
0.25 points
Question 4
The capital-labour ratio will increase when which of the following conditions is satisfied?
Answer

Investment per worker equals saving per worker.

Investment per worker exceeds saving per worker.

Investment per worker exceeds depreciation per worker.

Saving per worker equals depreciation per worker.

Output per worker exceeds capital per worker.
0.25 points
Question 5
Suppose there are two countries that are identical in every way with the following exception:
Country A has a lower depreciation rate than country B. Given this information, we know with
certainty that:
Answer

the steady state growth rate will be the same in the two countries.

the steady state growth rate will be higher in A than in B.

Capital per worker, K/N,
will be higher in B.

Output per worker, Y/N, will be higher in B.
0.25 points
Question 6
The following equation can be used to represent how individuals form expectations of inflation:
πte = θπt-1.
From 1970 on, the value of θ in the above
Answer

became gradually larger and approached 1.

became gradually smaller and approached zero.

remained constant at zero.

remained constant at negative one.

none of the above
0.25 points
Explanation; according to historical data, θ became gradually larger and approached 1
0.25 points
Question 7
Which of the following will NOT cause an increase in the natural rate of unemployment?
Answer

an increase in the markup, μ

an increase in unemployment benefits (included in z)

an increase in the expected inflation rate

a reduction in the response of wages to unemployment, α

none of the above
0.25 points
Question 8
Which of the following will likely cause an increase in output per worker?
Answer

an increase in education expenditures

an increase in the saving rate

an increase in on-the-job training

all of the above
0.25 points
Question 9
Assume the following dynamic AD relation when the central bank controls the interest rate:
g yt = 3% - (π t - π T ) .
In the medium run, a reduction in the inflation target from 9% to 4% will cause the unemployment
ate to:
Answer

decrease by 5%.

decrease by 4%.

increase by 5%.

increase by 4%.

remain unchanged.
0.25 points
Question 10
If output per capita grows by a constant 6% per year, then the standard of living would grow by
about ________ over 3 years.
Answer

12%

14%

18%

19%

22%
0.25 points
Increase in standard of living over 3 years = (1+0.06)^3 = 1.19. So percentage increase = (1.19-
1)*100/1 = 19%
Question 11
Suppose there is a permanent increase in a country's saving rate. This increase in the saving rate will
cause:
Answer

a permanently higher level of capital per worker.

a permanently higher level of output per capita.

a permanently faster growth rate of output.

both of the first two answers above

none of the above.
0.25 points
Explanation: as per solow model, when saving rate increases, there will be increase in both capital
and output per worker. Hence the co
ect option is part d)
Question 12
Constant returns to scale suggests that if N and K both increase by 6%:
Answer

output (Y) will increase by more than 3%.

Y will increase by exactly 3% . it should be 6%

Y will increase by less than 3%.

the capital-labour ratio (K/N) will decrease.
0.25 points
You are right here. That it should be 6%
Question 13
A permanent reduction in the saving rate will:
Answer

increase the growth of output per worker only temporarily.

increase the steady state growth of output per worker.

decrease the growth of output per worker only...