Question 1

In the Solow model,if f(k)= 2k0.5,s = 0.25,n = 0.1,and d = 0.4,what is the value of k at equilibrium?

Accepted Answer

A) 1 
B) 2 
C) 3 
D) 4 
A) 1 
B) 2 
C) 3 
D) 4 A

Question 2

The Golden Rule capital-labor ratio is the level of the capital-labor ratio that,in the steady state,

Accepted Answer

A) maximizes output per worker. 
B) maximizes investment per worker. 
C) maximizes consumption per worker. 
D) maximizes capital per worker. 
A) maximizes output per worker. 
B) maximizes investment per worker. 
C) maximizes consumption per worker. 
D) maximizes capital per worker. C

Question 3

The Solow model demonstrates that

Accepted Answer

A) in the absence of productivity growth, economic growth will turn negative in the long run. 
B) in the absence of productivity growth, economic growth will reach a steady state of zero per-capita growth in the long run. 
C) productivity growth must exceed the rate of growth in the population to avoid a steady state in the long run. 
D) productivity growth will inevitably decline due to diminishing marginal productivity. 
A) in the absence of productivity growth, economic growth will turn negative in the long run. 
B) in the absence of productivity growth, economic growth will reach a steady state of zero per-capita growth in the long run. 
C) productivity growth must exceed the rate of growth in the population to avoid a steady state in the long run. 
D) productivity growth will inevitably decline due to diminishing marginal productivity. B

Question 4

Briefly explain the shape of the per-worker production curve in the Solow model.If investment per worker initially exceeds saving per worker,how is the steady-state capital-labor ratio achieved?

Accepted Answer

The per-worker production curve is posit

Question 5

In the textbook model of endogenous growth,long-run output growth would increase if there were either a ________ in the saving rate or a ________ in the depreciation rate.

Accepted Answer

A) rise; rise 
B) rise; fall 
C) fall; rise 
D) fall; fall 
A) rise; rise 
B) rise; fall 
C) fall; rise 
D) fall; fall

Question 6

What happens in the steady state to the capital-labor ratio,output per worker,and consumption per worker when each of the following events occur? You should assume that the steady-state capital-labor ratio is below the Golden Rule level.
(a)Productivity falls.
(b)Population growth falls.
(c)The saving rate falls.
(d)The depreciation rate falls.

Accepted Answer

(a)k,y,and c all fal

Question 7

In the Solow model,the steady-state capital-labor ratio will decline if

Accepted Answer

A) the saving rate per worker increases. 
B) the consumption rate per worker declines. 
C) population growth increases. 
D) productivity increases. 
A) the saving rate per worker increases. 
B) the consumption rate per worker declines. 
C) population growth increases. 
D) productivity increases.

Question 8

Edward Denison's analysis of the American economy found that

Accepted Answer

A) total factor productivity was the largest source of economic growth since 1948. 
B) the contribution of labor growth has been more variable than the contribution of capital growth. 
C) productivity growth has been positive over every period of more than five years since WorldWar II. 
D) the contribution of labor growth has been greater than the contribution of capital growth. 
A) total factor productivity was the largest source of economic growth since 1948. 
B) the contribution of labor growth has been more variable than the contribution of capital growth. 
C) productivity growth has been positive over every period of more than five years since WorldWar II. 
D) the contribution of labor growth has been greater than the contribution of capital growth.

Question 9

The equation,ΔY/Y = ΔA/A + aKΔK/K + aNΔN/N,is known as

Accepted Answer

A) the production function. 
B) the Solow model. 
C) the productivity formula. 
D) the growth accounting equation. 
A) the production function. 
B) the Solow model. 
C) the productivity formula. 
D) the growth accounting equation.

Question 10

In the Solow model,if k = 8,y = 24,and s = 0.25,what is c?

Accepted Answer

A) 24 
B) 20 
C) 18 
D) 12 
A) 24 
B) 20 
C) 18 
D) 12

Question 11

According to the Solow model,an increase in the capital-labor ratio will

Accepted Answer

A) always reduce steady-state consumption per worker. 
B) always increase steady-state consumption per worker. 
C) reduce steady-state consumption per worker if the capital-labor ratio is below the Golden rule capital stock. 
D) increase steady-state consumption per worker if the capital-labor ratio is below the Golden rule capital stock. 
A) always reduce steady-state consumption per worker. 
B) always increase steady-state consumption per worker. 
C) reduce steady-state consumption per worker if the capital-labor ratio is below the Golden rule capital stock. 
D) increase steady-state consumption per worker if the capital-labor ratio is below the Golden rule capital stock.

Question 12

In the Solow model,if f(k)= 8k0.5,s = 0.2,n = 0.3,and d = 0.1,what is the value of k at equilibrium?

Accepted Answer

A) 1 
B) 4 
C) 9 
D) 16 
A) 1 
B) 4 
C) 9 
D) 16

Question 13

Use the growth accounting equation to calculate productivity growth,given output growth of 3.5%,capital stock growth of 5%,labor employment growth of 2%,the output elasticity of capital of 0.3,and the output elasticity of labor of 0.7.

Accepted Answer

The growth accounting equation is ΔY/Y =

Question 14

Suppose the current level of output is 5000 and the elasticity of output with respect to capital is 0.4.A 10% increase in capital would increase the current level of output to

Accepted Answer

A) 5020. 
B) 5050. 
C) 5200. 
D) 5500. 
A) 5020. 
B) 5050. 
C) 5200. 
D) 5500.

Question 15

In the textbook model of endogenous growth,the production function is modeled as

Accepted Answer

A) Y = AK. 
B) Y = C + I + G + NX. 
C) Y = X. 
D) Y = S - I. 
A) Y = AK. 
B) Y = C + I + G + NX. 
C) Y = X. 
D) Y = S - I.

Question 16

A country has the per-worker production function
yt = 6,   
where yt is output per worker and kt is the capital-labor ratio.The depreciation rate is 0.1 and the population growth rate is 0.1.The saving function is
St = 0.1Yt,
where St is total national saving and Yt is total output.
(a)What is the steady-state value of capital-labor ratio?
(b)What is the steady-state value of output per worker?
(c)What is the steady-state value of consumption per worker?

Accepted Answer

(a)s_f(k)= (n + d)k,so 0.1 × 6 =

Question 17

Which of the following would be a useful way to increase the saving rate?

Accepted Answer

A) Tax breaks to increase the real return that savers receive 
B) Increasing taxes if Ricardian equivalence holds 
C) Increasing government spending 
D) Increasing taxes on capital goods 
A) Tax breaks to increase the real return that savers receive 
B) Increasing taxes if Ricardian equivalence holds 
C) Increasing government spending 
D) Increasing taxes on capital goods

Question 18

Between 1870 and 2010,among the United States,Germany,Japan,and Australia,________ grew at the fastest rate and ________ grew at the slowest rate.

Accepted Answer

A) United States; Germany 
B) Germany; United States 
C) Australia; Japan 
D) Japan; Australia 
A) United States; Germany 
B) Germany; United States 
C) Australia; Japan 
D) Japan; Australia

Question 19

In the Solow model,if f(k)= 6k0.5,s = 0.1,n = 0.1,and d = 0.2,what is the value of c at equilibrium?

Accepted Answer

A) 10 
B) 10.4 
C) 10.8 
D) 11.2 
A) 10 
B) 10.4 
C) 10.8 
D) 11.2

Question 20

Over the past year,output grew 6%,capital grew 2%,and labor grew 4%.If the elasticities of output with respect to capital and labor are 0.3 and 0.7,respectively,how much did productivity grow?

Accepted Answer

A) 2)0% 
B) 2)6% 
C) 3)0% 
D) 3)3% 
A) 2)0% 
B) 2)6% 
C) 3)0% 
D) 3)3%

In the Solow model,if f(k)= 2k^0.5,s = 0.25,n = 0.1,and d = 0.4,what is the value of k at equilibrium?

The Golden Rule capital-labor ratio is the level of the capital-labor ratio that,in the steady state,

The Solow model demonstrates that

Briefly explain the shape of the per-worker production curve in the Solow model.If investment per worker initially exceeds saving per worker,how is the steady-state capital-labor ratio achieved?

In the textbook model of endogenous growth,long-run output growth would increase if there were either a in the saving rate or a in the depreciation rate.

In the Solow model,the steady-state capital-labor ratio will decline if

Edward Denison's analysis of the American economy found that

The equation,ΔY/Y = ΔA/A + a_KΔK/K + a_NΔN/N,is known as

In the Solow model,if k = 8,y = 24,and s = 0.25,what is c?

According to the Solow model,an increase in the capital-labor ratio will

In the Solow model,if f(k)= 8k^0.5,s = 0.2,n = 0.3,and d = 0.1,what is the value of k at equilibrium?

Use the growth accounting equation to calculate productivity growth,given output growth of 3.5%,capital stock growth of 5%,labor employment growth of 2%,the output elasticity of capital of 0.3,and the output elasticity of labor of 0.7.

Suppose the current level of output is 5000 and the elasticity of output with respect to capital is 0.4.A 10% increase in capital would increase the current level of output to

In the textbook model of endogenous growth,the production function is modeled as

Which of the following would be a useful way to increase the saving rate?

Between 1870 and 2010,among the United States,Germany,Japan,and Australia, grew at the fastest rate and grew at the slowest rate.

In the Solow model,if f(k)= 6k^0.5,s = 0.1,n = 0.1,and d = 0.2,what is the value of c at equilibrium?

Over the past year,output grew 6%,capital grew 2%,and labor grew 4%.If the elasticities of output with respect to capital and labor are 0.3 and 0.7,respectively,how much did productivity grow?

Introduction to Macroeconomics

The Measurement and Structure of the National Economy

Productivity, output, and Employment

Consumption, saving, and Investment

Saving and Investment in the Open Economy

The Asset Market, money, and Prices

Business Cycles

The Is-Lmad-As Model

Classical Business Cycle Analysis

Keynesianism: the Macroeconomics of Wage and Price Rigidity

Unemployment and Inflation

Exchange Rates, business Cycles, and Macroeconomic Policy in the Open Economy

Monetary Policy and the Federal Reserve System

Government Spending and Its Financing

Filters

Exam 6: Long-Run Economic Growth

In the Solow model,if f(k)= 2k0.5,s = 0.25,n = 0.1,and d = 0.4,what is the value of k at equilibrium?

The Golden Rule capital-labor ratio is the level of the capital-labor ratio that,in the steady state,

The Solow model demonstrates that

Briefly explain the shape of the per-worker production curve in the Solow model.If investment per worker initially exceeds saving per worker,how is the steady-state capital-labor ratio achieved?

In the textbook model of endogenous growth,long-run output growth would increase if there were either a ________ in the saving rate or a ________ in the depreciation rate.

In the Solow model,the steady-state capital-labor ratio will decline if

Edward Denison's analysis of the American economy found that

The equation,ΔY/Y = ΔA/A + aKΔK/K + aNΔN/N,is known as

In the Solow model,if k = 8,y = 24,and s = 0.25,what is c?

According to the Solow model,an increase in the capital-labor ratio will

In the Solow model,if f(k)= 8k0.5,s = 0.2,n = 0.3,and d = 0.1,what is the value of k at equilibrium?

Use the growth accounting equation to calculate productivity growth,given output growth of 3.5%,capital stock growth of 5%,labor employment growth of 2%,the output elasticity of capital of 0.3,and the output elasticity of labor of 0.7.

Suppose the current level of output is 5000 and the elasticity of output with respect to capital is 0.4.A 10% increase in capital would increase the current level of output to

In the textbook model of endogenous growth,the production function is modeled as

Which of the following would be a useful way to increase the saving rate?

Between 1870 and 2010,among the United States,Germany,Japan,and Australia,________ grew at the fastest rate and ________ grew at the slowest rate.

In the Solow model,if f(k)= 6k0.5,s = 0.1,n = 0.1,and d = 0.2,what is the value of c at equilibrium?

Over the past year,output grew 6%,capital grew 2%,and labor grew 4%.If the elasticities of output with respect to capital and labor are 0.3 and 0.7,respectively,how much did productivity grow?

Introduction to Macroeconomics

The Measurement and Structure of the National Economy

Productivity, output, and Employment

Consumption, saving, and Investment

Saving and Investment in the Open Economy

The Asset Market, money, and Prices

Business Cycles

The Is-Lmad-As Model

Classical Business Cycle Analysis

Keynesianism: the Macroeconomics of Wage and Price Rigidity

Unemployment and Inflation

Exchange Rates, business Cycles, and Macroeconomic Policy in the Open Economy

Monetary Policy and the Federal Reserve System

Government Spending and Its Financing

Filters

In the Solow model,if f(k)= 2k^0.5,s = 0.25,n = 0.1,and d = 0.4,what is the value of k at equilibrium?

In the textbook model of endogenous growth,long-run output growth would increase if there were either a in the saving rate or a in the depreciation rate.

The equation,ΔY/Y = ΔA/A + a_KΔK/K + a_NΔN/N,is known as

In the Solow model,if f(k)= 8k^0.5,s = 0.2,n = 0.3,and d = 0.1,what is the value of k at equilibrium?

Between 1870 and 2010,among the United States,Germany,Japan,and Australia, grew at the fastest rate and grew at the slowest rate.

In the Solow model,if f(k)= 6k^0.5,s = 0.1,n = 0.1,and d = 0.2,what is the value of c at equilibrium?