Download Homework Quiz 7

Macroeconomics
Quiz 7
Economic growth, financial system, business cycles
1. Use www.cia.gov World Factbook (go to Guide to country comparisons, follow to Economy) to find the following
information
a. list 3 largest economies in the world (in terms of GDP), include your numbers
b.
list 3 richest and 3 poorest economies in the world (per capita GDP), include numbers
c.
list 3 fastest and 3 slowest growing economies in the world, include numbers
d.
find the growth rate of US GDP.
e.
select any country and use the rule of 70 to calculate how many years it will take to double its GDP assuming
growth rate will remain at its current level
f.
what other indicators of well-being can one use to compare standards of living across countries? Compare
any two countries using data from the Factbook.
2. In 2000, the rate of growth of Real Gross Domestic Product was 3.5%. In 2001, it was 2.0%. That means
a) Total production was less in 2001 than in 2000.
b) Production was growing at an increasing rate
c) Production was growing at a decreasing rate
d) Production was decreasing at an increasing rate
3. Why are some countries rich and other countries are poor?
4. Give your advice: What should the government of a small African country do to improve economic growth, eventually
eliminate poverty, and become a rich country?
5. (bonus) Consider the following data for a closed economy (closed economy means Net Exports = 0):
Y = $12 trillion
C = $8 trillion
G = $2 trillion
T = $1.5 trillion
Government Borrowing = $1 trillion (= budget deficit)
a. Write down aggregate expenditure, aggregate income and government budget identities.
b. Use identities to calculate, show work:
Private savings
Business investment spending
Transfer payments
Government budget deficit or surplus