Exam 7: Economic Growth

Scenario: In a closed economy without a government, the consumption expenditure equals $5,000 and the investment expenditure equals $2,000. -Refer to the scenario above.What is the national income of the economy?

Scenario: Consider two countries: Country A and Country B. Both countries have the identical aggregate production functions, populations, and efficiency units of labor, but they have different saving rates. The saving rate is higher in Country A than in Country B. -Refer to the scenario above.If both economies have identical depreciation rates,then Country A's steady-state equilibrium will ________ Country B's steady-state equilibrium.

Scenario: Consider two countries, Country A and Country B. Both countries have identical aggregate production functions, populations, and efficiency units of labor, but they have different technologies. The technology used in Country B is more advanced than that used in Country A. -Refer to the scenario above.Which of the following statements will be true?

Consider two countries,Country A and Country B,that are alike in most respects.However,the saving rates in the two countries differ.Country A's saving rate is greater than Country B's saving rate.Which of the following statements is true?

Scenario: In the fictional nation of Gallifrey, the subsistence level of income is $1,000 per year. Currently 3 million people live in Gallifrey, and GDP in Gallifrey is $2 billion. -Refer to the scenario above.How does the average level of income in Gallifrey compare to the subsistence level?

The following figure shows the production function and the relationship between investment and physical capital stock for a given saving rate. -Refer to the figure above.If the physical capital stock is fixed at $300,the GDP in this economy is ________.

The following figure shows graphs of various types of growth. -Refer to the figure above.The data in Graph C best represent ________.

What is the Industrial Revolution? How did it contribute to modern economic growth?

If GDP per capita in year T is represented by YT and the GDP per capita in the following year is represented by YT₊₁,then the formula for calculating the growth rate between these two years is ________.

Country A's GDP per capita at the beginning of 2005 was $22,150.At the beginning of 2006,it increased to $27,600.Calculate Country A's growth rate of GDP per capita between 2005 and 2006.

The following table shows levels of consumption and investment in four countries. -Refer to the table above.Which country has the highest savings rate?

Define saving rate.If the aggregate saving in an economy is $10,000 and the aggregate income in the economy is $70,000,what is the saving rate in the economy?

GDP per capita in New Zealand grew from $15,000 to $25,000 over 10 years.What formula should you use to find New Zealand's average growth rate (g)over these 10 years?

If a country's human capital improves,the country will have ________ for a given level of physical capital stock.

Widespread mobile phone use has helped to reduce poverty in many poor nations.What is the best explanation for this?

If the investment on physical capital stock in an economy during a year is $40,000,the existing capital stock in the economy is $80,000,and the depreciation rate of capital during the year is 10 percent,the physical capital accumulated during the year is ________.

The saving rate in France is currently 6 percent.Which event would most likely decrease the current saving rate?

The Solow growth model is a tool that is used for studying ________.

Which of the following statements is true?

According to the Solow model,which of the following factors can lead to the sustained growth of a nation?