Download Exam Template - LBCC e

LBCC – ECON 1
Principles of Macroeconomics
Essay Exam #2
Name:
Score:
Directions: Use BOLD type to answer each of the following essay questions. Please retain the yellow
highlights. Be sure to use complete sentences and fully answer each question to the best of your ability.
The exam is due by 10/23/2013 at midnight. Save your template as a .doc or .docx file and email to the
instructor at [email protected]. Please name your file “First Name Last Name Exam 2”. The subject line
of your email should state “Exam 2”. Late exams will not be accepted.
Do not copy/paste answers from the textbook, Internet or any other source. Be sure to reference your
sources! Plagiarized answers will receive zero points.
Question 1: GDP is defined as the market value of all final goods and services produced within a country in a
given period of time. In spite of this definition, some production is left out of GDP. Explain why some final
goods and services are not included. (10 points)
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Question 2: Explain why it is the case that the value of intermediate goods produced and sold during the year is
not included directly as part of GDP, but the value of intermediate goods produced and not sold is included
directly as part of GDP. (10 points)
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Question 3: You find that your paycheck for the year is higher this year than last. Does that mean that your real
income has increased? Explain carefully. (10 points)
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Question 4: How is productivity related to the standard of living? In your answer be sure to explain what
productivity and standard of living mean. Make a list of things that determine labor productivity. (10 points)
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Question 5: Why does a nation’s standard of living depend on property rights? (10 points)
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Question 6: In addition to investment in physical and human capital, what other public policies might a country
adopt to increase productivity? Explain how the policies increase productivity. (10 points)
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Question 7: Explain what happens to interest rates and investment if the government budget goes from a deficit
to a surplus. (10 points)
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Question 8: Explain why the demand for loanable funds slopes downward and why the supply of loanable funds
slopes upward. (10 points)
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