1. Define productivity and identify its four determinants. Then identify which determinant of productivity each of these items represent a) U.S. discovers additional oil deposits. b) The knowledge you are acquiring at UNCW. c) You discover an more efficient way to study Macroeconomics. d) Ford opens a new factory to expand its production.

2. Northland has a population of 15,000, of whom 9,000 work 8 hours a day to produce real output of $342,000. Southland has a population of 8,000, of whom 7,000 work 7 hours a day to produce real output of $171,500. a) Write down the formula for calculating productivity and the formula for GDP per person. b) Compute the productivity of Northland and the productivity for Southland.

c) Calculate the GDP per person for Northland and for Southland. d) Which nation is doing better, Northland or Southland, and why?

3. a) Define a closed economy. Write down any 6 formulas for a closed economy you learned in Chapter 13. b) Paradise is a closed economy. Its GDP is $1000, government purchases are $200, and consumption is $700. If the government has a budget surplus of $25, calculate Paradise nation's (i) investment (ii) taxes

(iii) private saving

(iv) national saving

4. Draw the market for loanable funds graph and clearly label it. Then, show and explain the macroeconomic effects of a budget deficit. Your explanation should include the term crowding out effect.