Exam 11: Saving, capital Accumulation, and Output

Graphically illustrate and explain the effects of a decrease in the saving rate on the Solow growth model.In your graph,clearly label all curves and equilibria.

Which of the following is not a flow variable?

At the current steady state capital-labor ratio,assume that the steady state level of per capita consumption,(C / N)*,is less than the golden rule level of steady state per capita consumption.Given this information,we can be certain that

Suppose an economy experiences a 5% increase in human capital.We know that this will cause

For an economy in which there is no technological progress,explain what must occur for the steady state to occur.Also explain what this implies about the rate of growth of output,output per worker,and the capital stock.

Suppose the economy is initially in the steady state.A reduction in the depreciation rate (δ)will cause

The golden rule level of capital refers to

Suppose there is an increase in the saving rate.This increase in the saving rate must cause an increase in consumption per capita in the long run when

Our model of long-run economic growth suggests that

For this question assume that technological progress does not occur.The rate of saving in Canada has generally been greater than the saving rate in the U.S.Given this information,we know that in the long run

Which of the following represents the effects in period t of an increase in the saving rate in period t?

Suppose the saving rate is greater than the golden rule saving rate (sG).First,explain what must happen to the saving rate in order to increase steady state consumption.Second,what are the advantages and disadvantages of this policy to increase steady state consumption.

Which of the following statements is always true?

At the current steady state capital-labor ratio,assume that the steady state level of per capita consumption,(C / N)*,is greater than the golden rule level of steady state per capita consumption.Given this information,we can be certain that