Q6. Consider the variables x, y, w. Assume that the growth rates of these variables are given by 9(a) = 0.05, g(y) = 0.05, and g(w) = 0.06. Then the growth rate of the variable 2: = (%)2'!3 is approximately equal to a)-2% b)0% c)4% d)2% Q7. Suppose we calculate the percent change in real GDP from year 1 to year 2 using both the Laspeyres and the Paasche indices. With the Laspeyres index we get 15 percent and with the Paasche index we get 6 percent. The chain-weighted growth of real GDP is: a) 1.5 percent b) 9.5 percent c) 9.75 percent d) 10.5 percent Q8. This year, a real estate agent helped you buy a house for $200,000. The house was originally built in 1985. The agents commission was $12,000. How will this transaction affect this years GDP? a) Consumption expenditures will increase by $212,000. b) Consumption expenditures will increase by $12,000. c) Investment expenditures will increase by $212,000. d) Investment expenditures will increase by $200,000. Quantity of Tea Price of Basketballs Quantity of Basketballs 2014 Q9. 'What is the real GDP in 2017 in the economy above, using 2014 as the base year? a) 1,700$ b) 1,600$ c) 1,500$ d) 2,000$ Q10. Which of the following questions does the Solow model NOT help to explain? a) Why do countries have different growth rates in the same time periods? b) 'Why are some countries richer than other countries? c) Why do countries sustain growth in the long run? d) Will a country be richer if the investment rate is higher than another country, all else being equal