Economic Growth and Business Cycles — DU B.A. (Hons.) Economics Previous Year Question Papers

1. Which of the following statements is true about the relation between output and trade (a) Trade growth is independent of output growth (b) Output growth leads to lower trade volume (C) Trade reduces the level of output in an economy (d) Economic growth occurs only with higher exports 2. In the Solow model, capital deepening occurs under which of the following circumstances? (a) The difference between the sy curve and the (n' + 8)k line is positive, and k increases (b) The difference between the sy curve and the (n + S)k line is positive, and k decreases (c) The difference between the sy curve and the (n + 8)k line is negative, and k increases (d) The difference between the sy curve and the (n + 8)k line is negative, and k decreases 3. According to the convergence hypothesis, if two countries have the same steady state with identical levels of technology, investment, and population growth rates, which one is expected to be true (a) The country that is behind will grow faster than the country that is ahead (b) Both countries will grow at the same rate (c) The country that is ahead will grow faster than the country that is behind (d) Economic growth will stop for both countries 4. Which type of workers are most likely to migrate from poor to rich countries or regions? (a) Skilled workers. (c) Unskilled workers. (d) Both skilled and unskilled workers. 5. In the Solow growth model, a policy change affects the growth rate of output per worker along the transition to the new steady state (c) Does not affect it. (d) None of the above. 6. In the equation : H = e** L, y is (c) Increase in skilled labour because of additional units of investment (d) Additional years of schooling 7. The value of $ as assumed by the Romer model is The intermediate goods sector in Romer model operates under a (a) Perfectly competitive market (b) Oligopolistic market (c) Monopoly market (d) Monopsony market 'creative destruction' (a) Solow Model (b) RBC model (d) Schumpeterian model 10. The economics of "ideas" is intimately tied to (a) Decreasing returns, perfect competition (b) Increasing returns, perfect competition (c) Decreasing returns, imperfect competition (d) Increasing returns, imperfect competition 11. The optimal policy rule under discretion in a NKPC model targets. (b) Interest rates (c) Price level 12. Which of the following assumptions is NOT true under the RBC model? (a) Perfect competition (b) Sticky Wages (c) Higher savings result in larger capital stock (d) Technology shocks die out slowly 13. In the NKPC model, a positive output gap is associated with (a) Falling inflation (b) Rising inflation (c) Inflation remains unchanged (d) Inflation first falls, then rises 14. Which of the following is a productivity measure (b) GDP per worker (d) GDP growth 15. In the long run, the share of income devoted to capital, rK/Y and labor, wL/Y show (a) Upward trend (b) Downward trend (d) Can't be determined