Freelandia behaves according to Baby Solow. In Freelandia, the savings rate is always 40% of GDP, the depreciation rate is always 10% of the capital stock, and the production function is Y = K0.2. What is the steady-state capital output ratio in Freelandia? Answer with a number between 0 and 10.

Around 2010, nominal GDP in the U.S. was about $15 trillion. Using data provided (indirectly) in GLS, how many trillions of dollars was the value of the U.S. capital stock around 2010? Answer in trillions of dollars, with a number between 0 and 1000. Be within 10 (trillion dollars) of the right answer. [Aside: The value you’re calculating for this question is equipment investment, so it excludes the value of housing. FYI, physical housing in the U.S., ignoring the value of land in the U.S., is worth around $15 trillion.]

A consumer can borrow or lend freely at the market interest rate of r=100% per period. [If it’s helpful, think of the “period” as being a few decades.]  Her utility function is: U = ln(ct) + (1/2)ln(ct+1) She earns Yt=100 and Yt+1=100. But in period t+1 she will have to pay a tax of Tt+1=40.  If she’s maximizing her utility function subject to the IBC, how much will she consume in period t? 

According to recent research, roughly what percentage of attitudes toward trust persists to fourth-generation immigrant, on average? [Omit the percentage symbol in your answer: Just give a number]

In the traditional Keynesian model, what happens to GDP (Y) and consumption (C) when government purchases (G) rise? 

Ramey’s estimate of the short-run “multiplier effect” of government purchases on GDP (i.e., dY/dG) is closest to

In a two-period endowment economy, what’s the role of the real interest rate?

Consider an economy where all output (Y) is either consumer goods (C) or investment goods (I) . If income (Y) varies a lot from year to year, and people try to live according the permanent income hypothesis (PIH), which category of output will tend to be more volatile? 

The Quantity Theory of Money (QTM) predicts that a 10% increase in growth rate of money (M) will cause a _____ increase in the growth rate of real GDP (Y). 

In his theoretical work with Kydland, Ed Prescott found that business fluctuations (a.k.a. “business cycles) were a normal part of a fully real economy.