Exam 8: Long-Run Economic Growth

The break-even investment line becomes flatter when the depreciation growth rate ________ or the labour force growth rate ________.

Suppose y = k¹/²,total factor productivity is constant and equal to 1,s = 0.40,and d = 0.10.When the economy reaches the steady state,real GDP per worker is ________.

As the capital-labour ratio increases,investment per worker

Figure 8.2 -Refer to Figure 8.2.Suppose the economy is originally in steady state at k*₁.All else equal,if the labour force growth rate decreases,the change in the capital-labour ratio is represented by the vertical distance between

If d = the depreciation rate,n = the growth rate of the labour force,and k = the capital-labour ratio,which of the following expressions best describes break-even investment?

According to the AK growth model,budget surpluses ________ the national saving rate and ________ the steady-state growth rate.

A nation's growth rate will most likely ________ as it converges to a new,higher balanced growth path.

The critical determinant of real GDP per capita is

When incorporating labour-augmenting technological change into the Solow growth model,the focus is on

In the steady state in the Solow growth model,the economy is in equilibrium with the capital-labour ratio and real GDP per worker ________,and with capital,labour,and real GDP ________.

In the two-sector growth models,endogenous growth arises from

The idea that additional spending on research and development will produce additional knowledge that may further increase the productivity of capital is an argument used by some economists to claim that knowledge is subject to ________ returns.

Explain how an economy that is presently above its balanced growth path will converge back to its balanced growth path.

Government policies that reduce the price of education increase ________ in the AK growth models or increase ________ in the production function for new ideas in the two-sector growth model.

Countries that have experienced sustained increases in their standard of living have achieved them because of

Balanced growth occurs when

When break-even investment is subtracted from investment per worker,the result is

What effect would each of the following government actions have on the steady-state growth rate of the standard of living? a. a decrease in income tax rates b. a growing budget deficit c. an increase in funding for research and development at public universities

In the two-sector growth models,the size of the labour force,the proportion of the labour force devoted to research,and the productivity of researchers determine the

If the saving rate increases,break-even investment will be ________ than investment,and GDP per worker will ________.