Question 1

Which of the following will cause an increase in output per effective worker?

Accepted Answer

A)  A doubling of capital and technology. 
B)  An increase in population. 
C)  A doubling of both capital and labour. 
D)  An increase in technology. 
E)  An increase in capital per effective worker. 
A)  A doubling of capital and technology. 
B)  An increase in population. 
C)  A doubling of both capital and labour. 
D)  An increase in technology. 
E)  An increase in capital per effective worker.

Question 2

Which of the following plays the crucial role in explaining China's sustained high output growth since 1995?

Accepted Answer

A)  Massive labour supply. 
B)  Capital accumulation. 
C)  Technological progress. 
D)  All of the above. 
E)  None of the above. 
A)  Massive labour supply. 
B)  Capital accumulation. 
C)  Technological progress. 
D)  All of the above. 
E)  None of the above.

Question 3

Which of the following is always true after an economy reaches a balanced growth equilibrium?

Accepted Answer

A)  The growth rate of output equals the rate of depreciation. 
B)  The growth rate of capital is equal to the savings rate. 
C)  The growth rate of capital is equal to the growth rate of the effective workforce. 
D)  Population growth is zero. 
E)  The growth rate of output equals the rate of saving. 
A)  The growth rate of output equals the rate of depreciation. 
B)  The growth rate of capital is equal to the savings rate. 
C)  The growth rate of capital is equal to the growth rate of the effective workforce. 
D)  Population growth is zero. 
E)  The growth rate of output equals the rate of saving.

Question 4

Assume that an economy experiences both positive population growth and technological progress. Once the economy has achieved balanced growth, we know that the output per effective worker (Y/AN) is

Accepted Answer

A)  growing at a rate of gA - gN. 
B)  growing at a rate of gN. 
C)  growing at a rate of 0. 
D)  growing at a rate of gA + gN. 
E)  growing at a rate of gA. 
A)  growing at a rate of gA - gN. 
B)  growing at a rate of gN. 
C)  growing at a rate of 0. 
D)  growing at a rate of gA + gN. 
E)  growing at a rate of gA.

Question 5

Explain what is meant by the fertility and appropriability of the research process.

Accepted Answer

The fertility of research indicates the

Question 6

Among the reasons that the poor countries have been unable to close the "technology gap" with the rich countries is:

Accepted Answer

A)  poorly established property rights. 
B)  low education levels. 
C)  poorly developed financial markets. 
D)  All of the above. 
E)  None of the above. 
A)  poorly established property rights. 
B)  low education levels. 
C)  poorly developed financial markets. 
D)  All of the above. 
E)  None of the above.

Question 7

High growth in the rich countries from 1985 to 2010 was most likely due to:

Accepted Answer

A)  high technological progress. 
B)  high capital accumulation. 
C)  the destruction of capital during World War II. 
D)  high population growth. 
E)  a high saving rate. 
A)  high technological progress. 
B)  high capital accumulation. 
C)  the destruction of capital during World War II. 
D)  high population growth. 
E)  a high saving rate.

Question 8

The rate of growth of output per worker in Australia between 1985 and 2009 was approximately equal to which of the following?

Accepted Answer

A)  2.5%. 
B)  0.5%. 
C)  5.5%. 
D)  1.5%. 
E)  6.5%. 
A)  2.5%. 
B)  0.5%. 
C)  5.5%. 
D)  1.5%. 
E)  6.5%.

Question 9

Patents represent:

Accepted Answer

A)  how R&D spending translates into new ideas. 
B)  the rate of technological progress. 
C)  the extent to which firms benefit from the results of their own R&D spending. 
D)  the government standard that the innovator has to pass. 
E)  the protection given to new products by the law. 
A)  how R&D spending translates into new ideas. 
B)  the rate of technological progress. 
C)  the extent to which firms benefit from the results of their own R&D spending. 
D)  the government standard that the innovator has to pass. 
E)  the protection given to new products by the law.

Question 10

Which of the following is not constant when balanced growth is obtained?

Accepted Answer

A)  Y/AN. 
B)  K/AN. 
C)  Y. 
D)  AN. 
E)  All of the above. 
A)  Y/AN. 
B)  K/AN. 
C)  Y. 
D)  AN. 
E)  All of the above.

Question 11

Use the following information to answer the question(s) below:
6 = 0.13
gA = 0.05
gN = 0.04
-Given the information above, the steady state rate of growth of output is:

Accepted Answer

A)  4%. 
B)  9%. 
C)  5%. 
D)  22%. 
E)  0%. 
A)  4%. 
B)  9%. 
C)  5%. 
D)  22%. 
E)  0%.

Question 12

Use the following information to answer the question(s) below:
6 = 0.13
gA = 0.05
gN = 0.04
-Assume that an economy experiences both positive population growth and technological progress. Once the economy has achieved balanced growth, we know that growth rate of K/AN is:

Accepted Answer

A)  gA / gN. 
B)  0. 
C)  gA + gN. 
D)  gA. 
E)  gA - gN. 
A)  gA / gN. 
B)  0. 
C)  gA + gN. 
D)  gA. 
E)  gA - gN.

Question 13

Graphically illustrate and explain the effects of a decrease in the saving rate on the Solow- Swan growth model. In your answer, you must clearly label all curves and the initial and final equilibria. In your answer, explain what happens to the rate of growth of output per worker and the rate of growth of output as the economy adjusts to this event.

Accepted Answer

Refer to Figure 12.3 on p. 275 in the ch

Question 14

Graphically illustrate and explain the effects of an increase in population growth on the Solow- Swan growth model. In your answer, you must clearly label all curves and the initial and final equilibria. In your answer, explain what happens to the rate of growth of output per worker and the rate of growth of output as the economy adjusts to this event.

Accepted Answer

An increase in the rate of population gr

Question 15

Assume that an economy experiences both positive population growth and technological progress. A decrease in the saving rate will cause:

Accepted Answer

A)  a permanent decrease in the rate of growth of output. 
B)  no change in output per effective labour. 
C)  a permanent decrease in the rate of growth of output per worker. 
D)  no change in capital per effective labour. 
E)  no change in the rate of growth of output. 
A)  a permanent decrease in the rate of growth of output. 
B)  no change in output per effective labour. 
C)  a permanent decrease in the rate of growth of output per worker. 
D)  no change in capital per effective labour. 
E)  no change in the rate of growth of output.

Question 16

Assume the production function is represented by Y = F (K, AN). Now suppose the variable, A, increases by 20%. This implies that:

Accepted Answer

A)  the same output can be produced with 20% more labour. 
B)  the same output can be produced with 20% less labour. 
C)  the same quantity of labour can produce half the output. 
D)  the same output can be produced with half the capital. 
E)  the same quantity of labour can produce twice the output. 
A)  the same output can be produced with 20% more labour. 
B)  the same output can be produced with 20% less labour. 
C)  the same quantity of labour can produce half the output. 
D)  the same output can be produced with half the capital. 
E)  the same quantity of labour can produce twice the output.

Question 17

Which of the following can help explain the technology gap that exists between some countries?

Accepted Answer

A)  The relative absence of entrepreneurs. 
B)  Poorly established property rights. 
C)  Political instability. 
D)  All of the above. 
E)  None of the above. 
A)  The relative absence of entrepreneurs. 
B)  Poorly established property rights. 
C)  Political instability. 
D)  All of the above. 
E)  None of the above.

Question 18

Suppose there is an increase in the saving rate. Explain what effect this increase in the saving rate will have on the rate of growth of output per worker.

Accepted Answer

At the initial steady state, output per

Question 19

Use the following information to answer the question(s) below:
6 = 0.13
gA = 0.05
gN = 0.04
-Given the information above, we know that effective labour (AN) grows at what rate?

Accepted Answer

A)  4%. 
B)  2%. 
C)  17%. 
D)  9%. 
E)  11%. 
A)  4%. 
B)  2%. 
C)  17%. 
D)  9%. 
E)  11%.

Question 20

Use the information below to answer the following question(s):
1() the rate of depreciation is 14% per year,
2() the population growth rate is 4% per year, and
3() the growth rate of technology is 5% per year.
-Refer to the information above. Which of the following represents the steady- state growth rate of output in this economy?

Accepted Answer

A)  6%. 
B)  9%. 
C)  12%. 
D)  4%. 
E)  18%. 
A)  6%. 
B)  9%. 
C)  12%. 
D)  4%. 
E)  18%.

Exam 12: Technological Progress and Growth

Which of the following will cause an increase in output per effective worker?

Which of the following plays the crucial role in explaining China's sustained high output growth since 1995?

Which of the following is always true after an economy reaches a balanced growth equilibrium?

Assume that an economy experiences both positive population growth and technological progress. Once the economy has achieved balanced growth, we know that the output per effective worker (Y/AN) is

Explain what is meant by the fertility and appropriability of the research process.

Among the reasons that the poor countries have been unable to close the "technology gap" with the rich countries is:

High growth in the rich countries from 1985 to 2010 was most likely due to:

The rate of growth of output per worker in Australia between 1985 and 2009 was approximately equal to which of the following?

Patents represent:

Which of the following is not constant when balanced growth is obtained?

Use the following information to answer the question(s) below: 6 = 0.13 gA = 0.05 gN = 0.04 -Given the information above, the steady state rate of growth of output is:

Use the following information to answer the question(s) below: 6 = 0.13 gA = 0.05 gN = 0.04 -Assume that an economy experiences both positive population growth and technological progress. Once the economy has achieved balanced growth, we know that growth rate of K/AN is:

Assume that an economy experiences both positive population growth and technological progress. A decrease in the saving rate will cause:

Assume the production function is represented by Y = F (K, AN). Now suppose the variable, A, increases by 20%. This implies that:

Which of the following can help explain the technology gap that exists between some countries?

Suppose there is an increase in the saving rate. Explain what effect this increase in the saving rate will have on the rate of growth of output per worker.

Use the following information to answer the question(s) below: 6 = 0.13 gA = 0.05 gN = 0.04 -Given the information above, we know that effective labour (AN) grows at what rate?

A Tour of the World

A Tour of the Book

The Goods Market

Financial Markets

Goods and Financial Markets: the Islm Model

The Labour Market

Putting All Markets Together: the Asad Model

The Phillips Curve, the Natural Rate of Unemployment and Inflation

The Crisis

The Facts of Growth

Saving, Capital Accumulation and Output

Technological Progress: the Short, the Medium and the Long Run

Expectations: the Basic Tools

Financial Markets and Expectations

Expectations, Consumption and Investment

Expectations, Output and Policy

Openness in Goods and Financial Markets

The Goods Market

Output, the Interest Rate and the Exchange Rate

Exchange Rate Regimes

Should Policy-Makers Be Restrained

Fiscal Policy: a Summing up

Monetary Policy: a Summing up

Epilogue: the Story of Macroeconomics

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