Question 1

Endogenous growth models:

Accepted Answer

A)  explicitly specify how technology is accumulated. 
B)  explicitly specify how capital is accumulated. 
C)  ignore technology and capital accumulation, but focus on labor instead. 
D)  take technological progress as an exogenous variable that influences all the remaining endogenous variables. 
A)  explicitly specify how technology is accumulated. 
B)  explicitly specify how capital is accumulated. 
C)  ignore technology and capital accumulation, but focus on labor instead. 
D)  take technological progress as an exogenous variable that influences all the remaining endogenous variables.

Question 2

In the Cobb-Douglas production function, the closer capital's share of income is to 1:

Accepted Answer

A)  the closer to a straight line is the production function. 
B)  the more concave the production function. 
C)  the more convex the production function. 
D)  the more labor is used in the production process. 
A)  the closer to a straight line is the production function. 
B)  the more concave the production function. 
C)  the more convex the production function. 
D)  the more labor is used in the production process.

Question 3

The reason that an increase in α in the production function y = Akα makes growth more responsive to investment is:

Accepted Answer

A)  the higher the coefficient α, the more curved the production function becomes. 
B)  the higher the coefficient α, the lower the production function becomes. 
C)  the higher the coefficient α, the straighter is the related saving function. 
D)  the more curved is the related saving function, the more the steady state is affected by changes in the saving rate σ, population growth n, and depreciation δ. 
A)  the higher the coefficient α, the more curved the production function becomes. 
B)  the higher the coefficient α, the lower the production function becomes. 
C)  the higher the coefficient α, the straighter is the related saving function. 
D)  the more curved is the related saving function, the more the steady state is affected by changes in the saving rate σ, population growth n, and depreciation δ.

Question 4

Researchers seeking to estimate total factor productivity often use investment to proxy the growth of the capital stock, but investment is an inaccurate measure of true gK because:

Accepted Answer

A)  investment data ignores depreciation. 
B)  investment data ignores the intensity with which capital is used 
C)  investment data does not always measure the quality of new equipment versus old equipment. 
D)  All of the above. 
E)  None of the above. 
A)  investment data ignores depreciation. 
B)  investment data ignores the intensity with which capital is used 
C)  investment data does not always measure the quality of new equipment versus old equipment. 
D)  All of the above. 
E)  None of the above.

Question 5

Technology is often described as:

Accepted Answer

A)  a rival good. 
B)  an excludable good. 
C)  a nonrival good. 
D)  a free good. 
A)  a rival good. 
B)  an excludable good. 
C)  a nonrival good. 
D)  a free good.

Question 6

The endogenous growth models based on equipment investment and learning-by-doing assume that technological progress enters the neoclassical production function as:

Accepted Answer

A)  the result of intentional R&D activity by profit-motivated producers. 
B)  the result of investment in human capital. 
C)  an increase in the quantity of the factors. 
D)  an externality. 
A)  the result of intentional R&D activity by profit-motivated producers. 
B)  the result of investment in human capital. 
C)  an increase in the quantity of the factors. 
D)  an externality.

Question 7

The fundamental logic behind the AK model is:

Accepted Answer

A)  there are no diminishing returns when there is technological progress. 
B)  there is permanent economic growth when there is technological progress. 
C)  there are no diminishing returns when all factors are reproducible. 
D)  there is no economic growth unless all factors are reproducible. 
A)  there are no diminishing returns when there is technological progress. 
B)  there is permanent economic growth when there is technological progress. 
C)  there are no diminishing returns when all factors are reproducible. 
D)  there is no economic growth unless all factors are reproducible.

Question 8

The AK model is important because:

Accepted Answer

A)  investment is indeed the primary source of all economic growth. 
B)  technological progress can make the economy behave as if it had an AK production function. 
C)  in the long run, there are no diminishing returns. 
D)  all factors are essentially reproducible in some form. 
A)  investment is indeed the primary source of all economic growth. 
B)  technological progress can make the economy behave as if it had an AK production function. 
C)  in the long run, there are no diminishing returns. 
D)  all factors are essentially reproducible in some form.

Question 9

The endogenous growth models based on equipment investment and learning-by-doing assume that technology is related to:

Accepted Answer

A)  the economy's total capital stock. 
B)  the economy's level of production. 
C)  other variables in the model. 
D)  All of the above. 
E)  None of the above. 
A)  the economy's total capital stock. 
B)  the economy's level of production. 
C)  other variables in the model. 
D)  All of the above. 
E)  None of the above.

Question 10

When the learning-by-doing process is specified as εE = BY, then when we incorporate this technological progress into a standard neoclassical model with labor augmenting technological progress, the growth of technology ends up as a function of:

Accepted Answer

A)  the size of the total labor force. 
B)  the level of investment. 
C)  the depreciation rate. 
D)  All of the above. 
E)  None of the above. 
A)  the size of the total labor force. 
B)  the level of investment. 
C)  the depreciation rate. 
D)  All of the above. 
E)  None of the above.

Question 11

The Solow residual is:

Accepted Answer

A)  usually very small. 
B)  the part of economic growth that is caused by growth of the factors of production. 
C)  a measure of total factor productivity. 
D)  that proportion of economic growth not explained by any of the variables included in the Solow model. 
A)  usually very small. 
B)  the part of economic growth that is caused by growth of the factors of production. 
C)  a measure of total factor productivity. 
D)  that proportion of economic growth not explained by any of the variables included in the Solow model.

Question 12

The creation of technology is hampered by the fact that:

Accepted Answer

A)  ideas are rival goods. 
B)  ideas are easily excludable in a variety of ways. 
C)  patents and copyrights are awarded or enforced in all countries. 
D)  knowledge is often nonrival in nature. 
A)  ideas are rival goods. 
B)  ideas are easily excludable in a variety of ways. 
C)  patents and copyrights are awarded or enforced in all countries. 
D)  knowledge is often nonrival in nature.

Question 13

In addressing the issue of international trade and technological progress, the noted French mathematician/physicist Jules Henri Poincaré wrote: To create consists precisely in not making useless combinations and in making those which are useful.... Among chosen combinations the most fertile will often be those formed of elements drawn from domains which ___.

Accepted Answer

A)  are in the same line of specialized research. 
B)  are feasible. 
C)  are profitable. 
D)  are far apart. 
A)  are in the same line of specialized research. 
B)  are feasible. 
C)  are profitable. 
D)  are far apart.

Question 14

An implication of the AK model is that:

Accepted Answer

A)  investment can generate long-run growth. 
B)  the economy will never reach a steady state. 
C)  investment is subject to diminishing returns. 
D)  savings will diminish but never cease entirely. 
A)  investment can generate long-run growth. 
B)  the economy will never reach a steady state. 
C)  investment is subject to diminishing returns. 
D)  savings will diminish but never cease entirely.

Question 15

According to Weitzman (1996), An abstract case could be made that all innovations, being expressions of human imagination, are in a sense __.

Accepted Answer

A)  arithmetic. 
B)  multiplicative. 
C)  combinatoric. 
D)  path dependent. 
A)  arithmetic. 
B)  multiplicative. 
C)  combinatoric. 
D)  path dependent.

Question 16

Among the characteristics of technology is/are:

Accepted Answer

A)  the growth path of technology is not continuous. 
B)  the growth path of technology can be represented by a line with a constant slope. 
C)  it is at least partially nonrival in nature. 
D)  it is usually excludable. 
A)  the growth path of technology is not continuous. 
B)  the growth path of technology can be represented by a line with a constant slope. 
C)  it is at least partially nonrival in nature. 
D)  it is usually excludable.

Question 17

What comes first, basic scientific research or applied research?

Accepted Answer

A)  Basic research. 
B)  Applied Research. 
C)  Either one can precede the other. 
D)  Neither; accidental discovery always comes first. 
A)  Basic research. 
B)  Applied Research. 
C)  Either one can precede the other. 
D)  Neither; accidental discovery always comes first.

Question 18

The estimates of total factor productivity presented in the Supplement 4-2 suggest that technological progress:

Accepted Answer

A)  is similar in most countries. 
B)  varies across countries but is nearly constant in each country from one period to another. 
C)  varies quite a bit across countries and over time. 
D)  is very slow in developing economies and fast in highly-developed countries. 
A)  is similar in most countries. 
B)  varies across countries but is nearly constant in each country from one period to another. 
C)  varies quite a bit across countries and over time. 
D)  is very slow in developing economies and fast in highly-developed countries.

Question 19

In Rebelo's AK model, the production function is:

Accepted Answer

A)  a sharply rounded curve. 
B)  an upward-sloping straight line. 
C)  an increasingly steep downward-sloping curve to reflect falling costs. 
D)  a horizontal straight line. 
A)  a sharply rounded curve. 
B)  an upward-sloping straight line. 
C)  an increasingly steep downward-sloping curve to reflect falling costs. 
D)  a horizontal straight line.

Question 20

All things equal, an economy with a higher capital share of income, α,relative to an economy with a smaller capital share will:

Accepted Answer

A)  experience a shorter transitional period to a new steady state whenever saving rates change. 
B)  experience a longer transitional period to a new steady state whenever saving rates change. 
C)  experience the same transitional period to a new steady state whenever saving rates change. 
D)  experience no transitional period. 
A)  experience a shorter transitional period to a new steady state whenever saving rates change. 
B)  experience a longer transitional period to a new steady state whenever saving rates change. 
C)  experience the same transitional period to a new steady state whenever saving rates change. 
D)  experience no transitional period.

Endogenous growth models:

In the Cobb-Douglas production function, the closer capital's share of income is to 1:

The reason that an increase in α in the production function y = Ak^α makes growth more responsive to investment is:

Researchers seeking to estimate total factor productivity often use investment to proxy the growth of the capital stock, but investment is an inaccurate measure of true g_K because:

Technology is often described as:

The endogenous growth models based on equipment investment and learning-by-doing assume that technological progress enters the neoclassical production function as:

The fundamental logic behind the AK model is:

The AK model is important because:

The endogenous growth models based on equipment investment and learning-by-doing assume that technology is related to:

When the learning-by-doing process is specified as εE = BY, then when we incorporate this technological progress into a standard neoclassical model with labor augmenting technological progress, the growth of technology ends up as a function of:

The Solow residual is:

The creation of technology is hampered by the fact that:

An implication of the AK model is that:

According to Weitzman (1996), An abstract case could be made that all innovations, being expressions of human imagination, are in a sense __.

Among the characteristics of technology is/are:

What comes first, basic scientific research or applied research?

The estimates of total factor productivity presented in the Supplement 4-2 suggest that technological progress:

In Rebelo's AK model, the production function is:

All things equal, an economy with a higher capital share of income, α,relative to an economy with a smaller capital share will:

The Welfare Gains From Trade

Trade and Growth: the Empirical Evidence

International Trade and Factor Accumulation

Technological Progress As Creative Destruction

International Trade and Technological Progress

Multi-Sector Models and International Trade

International Trade and Technology Transfers

Restating the Case for Free Trade

Filters

Exam 4: Overcoming Diminishing Returns: Technology As an Externality

Endogenous growth models:

In the Cobb-Douglas production function, the closer capital's share of income is to 1:

The reason that an increase in α in the production function y = Akα makes growth more responsive to investment is:

Researchers seeking to estimate total factor productivity often use investment to proxy the growth of the capital stock, but investment is an inaccurate measure of true gK because:

Technology is often described as:

The endogenous growth models based on equipment investment and learning-by-doing assume that technological progress enters the neoclassical production function as:

The fundamental logic behind the AK model is:

The AK model is important because:

The endogenous growth models based on equipment investment and learning-by-doing assume that technology is related to:

When the learning-by-doing process is specified as εE = BY, then when we incorporate this technological progress into a standard neoclassical model with labor augmenting technological progress, the growth of technology ends up as a function of:

The Solow residual is:

The creation of technology is hampered by the fact that:

An implication of the AK model is that:

According to Weitzman (1996), An abstract case could be made that all innovations, being expressions of human imagination, are in a sense __.

Among the characteristics of technology is/are:

What comes first, basic scientific research or applied research?

The estimates of total factor productivity presented in the Supplement 4-2 suggest that technological progress:

In Rebelo's AK model, the production function is:

All things equal, an economy with a higher capital share of income, α,relative to an economy with a smaller capital share will:

The Welfare Gains From Trade

Trade and Growth: the Empirical Evidence

International Trade and Factor Accumulation

Technological Progress As Creative Destruction

International Trade and Technological Progress

Multi-Sector Models and International Trade

International Trade and Technology Transfers

Restating the Case for Free Trade

Filters

The reason that an increase in α in the production function y = Ak^α makes growth more responsive to investment is:

Researchers seeking to estimate total factor productivity often use investment to proxy the growth of the capital stock, but investment is an inaccurate measure of true g_K because: