Question 1

Figure 4.1
Determinants
of   k/k  
-In Figure 4.1, if the initial amount of labour increases, then in the steady state:

Accepted Answer

A) the growth rate of capital per worker increases. 
B) the growth rate of output per worker rises. 
C) the growth rate of output per worker is the same. 
D) the population growth rate rises. 
A) the growth rate of capital per worker increases. 
B) the growth rate of output per worker rises. 
C) the growth rate of output per worker is the same. 
D) the population growth rate rises. C

Question 2

Why does the Solow growth model show the economies of poor countries tend to converge over time toward richer ones in terms of per capita and real GDP per worker?

Accepted Answer

Poorer economies tend to converge with richer ones because poorer economies tend to grow faster due to diminishing average product of capital. A poorer country, i.e. one that is further away from k*, will have a higher growth rate of capital and output per worker.

Question 3

An increase in the depreciation rate affects the steady-state capital per worker the same way as an increase in the population growth rate.

Accepted Answer

A) True 
 B)False  True

Question 4

Figure 4.1
Determinants
of   k/k  
-In Figure 4.1, an increase in technology:

Accepted Answer

A) increases s•(y/k) 
B) decreases s•(y/k) 
C) increases s   + n. 
D) decreases s   + n. 
A) increases s•(y/k) 
B) decreases s•(y/k) 
C) increases s   + n. 
D) decreases s   + n.

Question 5

Since 1960 the data show a tendency of output per worker to converge:

Accepted Answer

A) in all countries in the world. 
B) countries with different savings rates. 
C) in OECD countries. 
D) none of the above. 
A) in all countries in the world. 
B) countries with different savings rates. 
C) in OECD countries. 
D) none of the above.

Question 6

In the Solow growth model in the short run, an increase in the labour input L(0),

Accepted Answer

A) decrease the growth rate of real output per worker. 
B) increases s•(y/k). 
C) increase the growth rate of capital per worker. 
D) decrease s   + n. 
A) decrease the growth rate of real output per worker. 
B) increases s•(y/k). 
C) increase the growth rate of capital per worker. 
D) decrease s   + n.

Question 7

If the saving rate increases in the Solow growth model, then in the steady state the growth rate of capital per worker is:

Accepted Answer

A) higher. 
B) unchanged. 
C) lower. 
D) rising. 
A) higher. 
B) unchanged. 
C) lower. 
D) rising.

Question 8

Figure 4.1
Determinants
of   k/k  
-In Figure 4.1, if the technology improves, then:

Accepted Answer

A) the steady-state capital stock increases. 
B) the steady-state growth in capital per worker increases. 
C) the steady-state growth in output per worker increases. 
D) the population growth rate increases. 
A) the steady-state capital stock increases. 
B) the steady-state growth in capital per worker increases. 
C) the steady-state growth in output per worker increases. 
D) the population growth rate increases.

Question 9

Convergence will not happen if economies around the world have:

Accepted Answer

A) different capital per worker growth rates in the transition. 
B) different initial levels of labour input, L(0). 
C) different initial starting points. 
D) none of the above. 
A) different capital per worker growth rates in the transition. 
B) different initial levels of labour input, L(0). 
C) different initial starting points. 
D) none of the above.

Question 10

Figure 4.1
Determinants
of   k/k  
-In Figure 4.1, an increase in technology:

Accepted Answer

A) increases k*. 
B) does not affect k*. 
C) decreases k*. 
D) makes k* zero. 
A) increases k*. 
B) does not affect k*. 
C) decreases k*. 
D) makes k* zero.

Question 11

Figure 4.1
Determinants
of   k/k  
-In Figure 4.1, if the technology improves, then:

Accepted Answer

A) s•(y/k) increases. 
B) s   + n increases. 
C) s•(y/k) decreases. 
D) s   + n decreases. 
A) s•(y/k) increases. 
B) s   + n increases. 
C) s•(y/k) decreases. 
D) s   + n decreases.

Question 12

Figure 4.1
Determinants
of   k/k  
-In Figure 4.1, an increase in the population growth rate:

Accepted Answer

A) increases k*. 
B) does not affect k*. 
C) decreases k*. 
D) makes k* zero. 
A) increases k*. 
B) does not affect k*. 
C) decreases k*. 
D) makes k* zero.

Question 13

In the Solow growth model during the transition an increase in technology:

Accepted Answer

A) lowers the growth rate of capital per worker. 
B) does not change the growth rate of capital per worker. 
C) raises the growth rate of capital per worker. 
D) causes the growth rate of capital to fall to zero per worker. 
A) lowers the growth rate of capital per worker. 
B) does not change the growth rate of capital per worker. 
C) raises the growth rate of capital per worker. 
D) causes the growth rate of capital to fall to zero per worker.

Question 14

In the Solow growth model in the long run or steady state, an increase in the labour input L(0) will,

Accepted Answer

A) decrease the capital stock. 
B) lead to a positive growth of the capital stock per worker. 
C) not change real output per worker. 
D) all of the above. 
A) decrease the capital stock. 
B) lead to a positive growth of the capital stock per worker. 
C) not change real output per worker. 
D) all of the above.

Question 15

Figure 4.1
Determinants
of   k/k  
-In Figure 4.1, an increase in the depreciation rate:

Accepted Answer

A) increases k*. 
B) does not affect k*. 
C) decreases k*. 
D) makes k* zero. 
A) increases k*. 
B) does not affect k*. 
C) decreases k*. 
D) makes k* zero.

Question 16

In the Solow growth model, if the population growth rate, n, increases, then in the steady state:

Accepted Answer

A) output per worker grows slower. 
B) capital per worker grows slower. 
C) capital per worker grows at the same rate, zero. 
D) all of the above. 
A) output per worker grows slower. 
B) capital per worker grows slower. 
C) capital per worker grows at the same rate, zero. 
D) all of the above.

Question 17

In the Solow growth model during the transition an increase in technology:

Accepted Answer

A) lowers the growth rate of capital and output per worker. 
B) raises the growth rate of capital per worker and lowers the growth rate of output per worker. 
C) raises the growth rate of capital and output per worker. 
D) lowers the growth rate of capital per worker and raises the growth rate of output per worker. 
A) lowers the growth rate of capital and output per worker. 
B) raises the growth rate of capital per worker and lowers the growth rate of output per worker. 
C) raises the growth rate of capital and output per worker. 
D) lowers the growth rate of capital per worker and raises the growth rate of output per worker.

Question 18

An increase in technology cause the growth in real output per worker to be higher in the long run or steady-state.

Accepted Answer

A) True 
 B)False

Question 19

In the revised version of the Solow growth model the optimal level of capital stock per worker depends on:

Accepted Answer

A) the saving rating. 
B) the depreciation rate. 
C) population growth rate. 
D) all of the above. 
A) the saving rating. 
B) the depreciation rate. 
C) population growth rate. 
D) all of the above.

Question 20

Figure 4.1
Determinants
of   k/k  
-In Figure 4.1, if the initial amount of labour increases, then during the transition to the steady state:

Accepted Answer

A) the growth rate of capital per worker and output per worker increase. 
B) the growth rate of capital per worker and output per worker decrease. 
C) the growth rate of capital per worker increases and output per worker decrease. 
D) the growth rate of capital per worker decreases and output per worker increases. 
A) the growth rate of capital per worker and output per worker increase. 
B) the growth rate of capital per worker and output per worker decrease. 
C) the growth rate of capital per worker increases and output per worker decrease. 
D) the growth rate of capital per worker decreases and output per worker increases.

Figure 4.1 Determinants of k/k -In Figure 4.1, if the initial amount of labour increases, then in the steady state:

Why does the Solow growth model show the economies of poor countries tend to converge over time toward richer ones in terms of per capita and real GDP per worker?

An increase in the depreciation rate affects the steady-state capital per worker the same way as an increase in the population growth rate.

Figure 4.1 Determinants of k/k -In Figure 4.1, an increase in technology:

Since 1960 the data show a tendency of output per worker to converge:

In the Solow growth model in the short run, an increase in the labour input L(0),

If the saving rate increases in the Solow growth model, then in the steady state the growth rate of capital per worker is:

Figure 4.1 Determinants of k/k -In Figure 4.1, if the technology improves, then:

Convergence will not happen if economies around the world have:

Figure 4.1 Determinants of k/k -In Figure 4.1, an increase in technology:

Figure 4.1 Determinants of k/k -In Figure 4.1, if the technology improves, then:

Figure 4.1 Determinants of k/k -In Figure 4.1, an increase in the population growth rate:

In the Solow growth model during the transition an increase in technology:

In the Solow growth model in the long run or steady state, an increase in the labour input L(0) will,

Figure 4.1 Determinants of k/k -In Figure 4.1, an increase in the depreciation rate:

In the Solow growth model, if the population growth rate, n, increases, then in the steady state:

In the Solow growth model during the transition an increase in technology:

An increase in technology cause the growth in real output per worker to be higher in the long run or steady-state.

In the revised version of the Solow growth model the optimal level of capital stock per worker depends on:

Figure 4.1 Determinants of k/k -In Figure 4.1, if the initial amount of labour increases, then during the transition to the steady state:

Thinking About Macroeconomics

National-Income Accounting: Gross Domestic Product and the Price Level

Introduction to Economic Growth

Conditional Convergence and Long-Run Economic Growth

Macroeconomics Without Microeconomic Foundations

Markets, Prices, Supply, and Demand

Consumption, Saving, and Investment

An Equilibrium Business-Cycle Model

Capital Utilization and Unemployment

The Demand for Money and the Price Level

Inflation, Money Growth, and Interest Rates

Government Expenditure

Taxes

Public Debt

Money and Business Cycles I: the Price-Misperceptions Model

Money and Business Cycles Ii: Sticky Prices and Nominal Wage Rates

World Markets in Goods and Credit

Exchange Rates

Filters

Exam 4: Working With the Solow Growth Model

Figure 4.1 Determinants of k/k -In Figure 4.1, if the initial amount of labour increases, then in the steady state:

Why does the Solow growth model show the economies of poor countries tend to converge over time toward richer ones in terms of per capita and real GDP per worker?

An increase in the depreciation rate affects the steady-state capital per worker the same way as an increase in the population growth rate.

Figure 4.1 Determinants of k/k -In Figure 4.1, an increase in technology:

Since 1960 the data show a tendency of output per worker to converge:

In the Solow growth model in the short run, an increase in the labour input L(0),

If the saving rate increases in the Solow growth model, then in the steady state the growth rate of capital per worker is:

Figure 4.1 Determinants of k/k -In Figure 4.1, if the technology improves, then:

Convergence will not happen if economies around the world have:

Figure 4.1 Determinants of k/k -In Figure 4.1, an increase in technology:

Figure 4.1 Determinants of k/k -In Figure 4.1, if the technology improves, then:

Figure 4.1 Determinants of k/k -In Figure 4.1, an increase in the population growth rate:

In the Solow growth model during the transition an increase in technology:

In the Solow growth model in the long run or steady state, an increase in the labour input L(0) will,

Figure 4.1 Determinants of k/k -In Figure 4.1, an increase in the depreciation rate:

In the Solow growth model, if the population growth rate, n, increases, then in the steady state:

In the Solow growth model during the transition an increase in technology:

An increase in technology cause the growth in real output per worker to be higher in the long run or steady-state.

In the revised version of the Solow growth model the optimal level of capital stock per worker depends on:

Figure 4.1 Determinants of k/k -In Figure 4.1, if the initial amount of labour increases, then during the transition to the steady state:

Thinking About Macroeconomics

National-Income Accounting: Gross Domestic Product and the Price Level

Introduction to Economic Growth

Conditional Convergence and Long-Run Economic Growth

Macroeconomics Without Microeconomic Foundations

Markets, Prices, Supply, and Demand

Consumption, Saving, and Investment

An Equilibrium Business-Cycle Model

Capital Utilization and Unemployment

The Demand for Money and the Price Level

Inflation, Money Growth, and Interest Rates

Government Expenditure

Taxes

Public Debt

Money and Business Cycles I: the Price-Misperceptions Model

Money and Business Cycles Ii: Sticky Prices and Nominal Wage Rates

World Markets in Goods and Credit

Exchange Rates

Filters