1 Suppose that the production function for the economy is Y = AK0.5L0.5. If the capital stock = 40,000, the quantity of labor = 10,000, and the efficiency index = 3, real GDP is

2 Suppose that the production function for the economy is Y = AK1/4L3/4. Assume that real GDP is $8,000 billion, capital stock is $32,000 billion, and the labor supply is 120 million (or 0.120 billion) workers. Total factor productivity for this economy is

3 Suppose that the production function for the economy is: Y = AK1/4L3/4. Assume that A = 1,000, the capital stock is $32,000 billion, and the labor force is 120 million (or 0.120 billion) workers. The value of the marginal product of labor is

4 If the expected inflation rate rises from 3% to 5% when the nominal interest rate is 4%, the Fisher effect asserts that the nominal interest rate would

5 Suppose y = Ak1/4, the capital-labor ratio is $40,000 per worker, the level of total factor productivity is 800, 70% of the population works, and there are 70 million workers. Real GDP per capita is

6 Suppose the money supply is set to grow at 12%, real GDP grows at 4%, and the nominal interest rate on Aaa corporate bonds is 10%. Using the quantity theory of money and the Fisher equation, the expected real interest rate on Aaa corporate bonds should average

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