1. What was Iceland's Comparative Advantage?
(a) Produce, Novels, Energy
(b) Manufacturing, Novels, Produce
(c) Energy, Fish, Novels
(d) Fish, Novels, Manufacturing

2. How did the secret document change agriculture in China?
(a) It increased L
(b) It increased A
(c) It increased K
(d) It increased P

3. Which of the following is true about MPL
(a) It is negative and decreasing
(b) It is negative and increasing
(c) It is positive and decreasing
(d) It is positive and increasing

4. What is the capital accumulation equation in the Solow Growth Model?
(a) ΔK = It - dK
(b) ΔK t+1 = It - dKt
(c) ΔIt = dKt
(d) ΔI t+1 = Kt - dIt

5. What is output per worker in the Solow-Growth Model?
(a) Ᾱ(s/d)^(.5)
(b) Ᾱ^(.5)(s/d)^(1.5)
(c) Ᾱ(d/s)^(.5)
(d) Ᾱ^(1.5)(s/d)^(.5)

6. What best describes changes in manufacturing employment in the U.S.?
(a) Number of workers has gone down, skill level have gone down
(b) Number of workers has gone up, skill level have gone up
(c) Number of workers has gone down, skill level have gone up
(d) Number of workers has gone up, skill level have gone down 7. Which person on the presidential ticket is the most Hayekian?
(a) Ryan
(b) Romney
(c) Obama
(d) Biden

8. What happened when prices were frozen?
(a) Prices stopped increasing
(b) GDP Increased
(c) Trade increased
(d) People hid cows

9a. What was the primary cause of the giant pool of money investing in home mortgages?
(a) Increased trade deficits
(b) High interest rates in the U.S.
(c) Low interest rates in the U.S.
(d) Relaxed credit standards

9b. What spread the cold of collateralized debt obligations?
(a) CDSs
(b) CSDs
(c) DSDs
(d) SDSs 10. What best describes what happened to Magnitar?
(a) They made money making crappy CDOs
(b) They lost money making crappy CDOs
(c) They made money making good CDOs
(d) They lost money making good CDOs

11. What is a new thing that the fed is doing?
(a) Changing Interest Rates
(b) Lending Directly to Banks
(c) Buy Assets like Mortgage Backed Securities

12. What are the "origin stories" of the Fed and ECB "primary fears"?
(a) Both fear unemployment
(b) Both fear inflation
(c) Fed fears inflation, ECB fears unemployment
(d) Fed fears unemployment, ECB fears inflation

13. What would be hard to do if the U.S. had no debt?
(a) Fiscal Policy
(b) Monetary Policy
(c) Exporting
(d) Importing

14. What was Iceland voting on?
(a) Repaying the banks
(b) Repaying bank customers
(c) Repaying foreign governments 15. what hurt Switzerland about its currency?
(a) it was too strong
(b) it was too weak
(c) it was not tradable outside of Switzerland

16. What part of CPI are more volatile?
(a) clothing and electronics
(b) house and cars
(c) food and energy
(d) health and education services

17. What currency did the Argentines peg the Peso to?
(a) Swiss Franc
(b) Euro
(c) Dollar
(d) Yen

Podcast 1: Switzerland
(a) Explain how a strong currency can help and hurt a country.
It is helpful to consumers because it makes it cheaper to import goods, which helps to control inflation. But at the same time, it makes it more expensive for others to purchase your goods, which makes exports go down. Both effects will tend to depress GDP, holding everything else constant.
Podcast 2: CPI
(a) Explain the difference between core and overall CPI and how this relates to the goods in the podcast.
Core CPI measures changes in the price level for less volatile goods, i.e. it excludes things such as food and energy. In the podcast we saw a large price change for lettuce, which would be included in overall but not core CPI.
Podcast 3: Iceland
Explain why trade was important in the development of Iceland's economy. Cite examples of things that Iceland was not able to consume without trade, and things that Iceland has been able to trade.
Iceland had few natural resources, but by exporting fish it was able to begin trading with other