Question 1

Figure 6.1  
-According to Figure 6.1,in postwar U.S history ________.

Accepted Answer

A) productivity growth was always exceeded by labor growth 
B) labor growth has always exceeded capital growth 
C) productivity growth has always exceeded capital growth 
D) output growth has always exceeded productivity growth 
A) productivity growth was always exceeded by labor growth 
B) labor growth has always exceeded capital growth 
C) productivity growth has always exceeded capital growth 
D) output growth has always exceeded productivity growth

Question 2

If productivity is growing at some sustained rate g,then output and capital per worker ________.

Accepted Answer

A) are growing at the same rate g,in a stable steady state 
B) are growing faster than g,because improving technology encourages a higher rate of saving and investment 
C) are growing slower than g,because some of the new capital is merely replacing obsolete capital 
D) are growing faster than g,because productivity does not suffer from diminishing marginal product 
A) are growing at the same rate g,in a stable steady state 
B) are growing faster than g,because improving technology encourages a higher rate of saving and investment 
C) are growing slower than g,because some of the new capital is merely replacing obsolete capital 
D) are growing faster than g,because productivity does not suffer from diminishing marginal product

Question 3

In the past 50 years,per capita income in some countries such as ________ and ________ has hardly changed relative to per capita income in the United States.

Accepted Answer

A) Mexico;Argentina 
B) Kenya;Nigeria 
C) South Korea;India 
D) France;United Kingdom 
A) Mexico;Argentina 
B) Kenya;Nigeria 
C) South Korea;India 
D) France;United Kingdom

Question 4

Within rich economies,there is strong evidence of convergence ________.

Accepted Answer

A) for regions within a country 
B) with developing economies 
C) leading to military conflict 
D) of capital stocks,rather than output 
A) for regions within a country 
B) with developing economies 
C) leading to military conflict 
D) of capital stocks,rather than output

Question 5

In the Solow model,the faster growth of output that results from an increase in the saving rate is temporary,because ________.

Accepted Answer

A) of diminishing marginal product of capital 
B) with a larger stock of capital,consumption is encouraged more than investment 
C) the rising capital stock depreciates at a faster rate 
D) the economy settles into a steady state in which saving no longer rises 
A) of diminishing marginal product of capital 
B) with a larger stock of capital,consumption is encouraged more than investment 
C) the rising capital stock depreciates at a faster rate 
D) the economy settles into a steady state in which saving no longer rises

Question 6

Figure 6.1  
-According to Figure 6.1,the average annual rate of growth of the U.S.economy in the period 1948-73 equalled ________.

Accepted Answer

A) 1.8 percent 
B) 4.0 percent 
C) 39 percent 
D) 697 percent 
A) 1.8 percent 
B) 4.0 percent 
C) 39 percent 
D) 697 percent

Question 7

Economic growth ________.

Accepted Answer

A) is driven by different elements in different economies 
B) is driven primarily by digital technology 
C) is driven primarily by labor growth 
D) cannot be explained using economic models 
A) is driven by different elements in different economies 
B) is driven primarily by digital technology 
C) is driven primarily by labor growth 
D) cannot be explained using economic models

Question 8

There are no questions for this section.

Accepted Answer

As the input statement "There are no que

Question 9

Given the production function Y = A   
   
if output grows by five percent,the capital input grows by five percent,and the labor input grows by two percent,calculate the Solow residual.Calculate the growth rates of output per worker and capital per worker.

Accepted Answer

The Solow residual @#IMG-DLM& = 0.05 - 0

Question 10

The per-worker production function is ________.

Accepted Answer

A) upward-sloping 
B) downward-sloping 
C) vertical 
D) horizontal 
A) upward-sloping 
B) downward-sloping 
C) vertical 
D) horizontal

Question 11

The per-worker production function flattens out due to ________.

Accepted Answer

A) the negative relationship between price and quantity demanded 
B) the positive relationship between price and quantity demanded 
C) the diminishing marginal product of capital 
D) an increase in the general level of prices 
A) the negative relationship between price and quantity demanded 
B) the positive relationship between price and quantity demanded 
C) the diminishing marginal product of capital 
D) an increase in the general level of prices

Question 12

The Solow model suggests that economies with the same aggregate production function,ratio of workers to the total population and saving rates will ________.

Accepted Answer

A) trade with one another 
B) start with different initial levels of per capita income 
C) possess the same rate of depreciation 
D) experience convergence 
A) trade with one another 
B) start with different initial levels of per capita income 
C) possess the same rate of depreciation 
D) experience convergence

Question 13

In the Solow model,which of the following is an exogenous variable?

Accepted Answer

A) productivity 
B) the capital-labor ratio 
C) consumption per worker 
D) investment per worker 
A) productivity 
B) the capital-labor ratio 
C) consumption per worker 
D) investment per worker

Question 14

Productivity is ________.

Accepted Answer

A) determined by central bank policy 
B) the combined effect of monetary and fiscal policy 
C) the residual component of the production function 
D) driven by changes in the rate of growth of output 
A) determined by central bank policy 
B) the combined effect of monetary and fiscal policy 
C) the residual component of the production function 
D) driven by changes in the rate of growth of output

Question 15

On the Solow Diagram,an increase in productivity is shown by ________.

Accepted Answer

A) an upward shift of the depreciation plus capital dilution line 
B) an upward shift of the investment function 
C) a downward shift of the depreciation plus capital dilution line 
D) a downward shift of the investment function 
A) an upward shift of the depreciation plus capital dilution line 
B) an upward shift of the investment function 
C) a downward shift of the depreciation plus capital dilution line 
D) a downward shift of the investment function

Question 16

When an economy experiences a one-time increase in productivity,there is an increase in the long-run,steady state value of ________.

Accepted Answer

A) the growth rate of output 
B) the depreciation rate 
C) consumption per worker 
D) the saving rate 
A) the growth rate of output 
B) the depreciation rate 
C) consumption per worker 
D) the saving rate

Question 17

The growth accounting equation suggests that the growth rate of output is equal to the growth rate of ________.

Accepted Answer

A) total factor productivity plus the contributions of both capital and labor 
B) total factor productivity minus the rate of depreciation 
C) capital and labor 
D) the overall population 
A) total factor productivity plus the contributions of both capital and labor 
B) total factor productivity minus the rate of depreciation 
C) capital and labor 
D) the overall population

Question 18

If capital per-worker is rising,then ________.

Accepted Answer

A) depreciation is equal to investment 
B) depreciation is greater than investment 
C) depreciation is less than investment 
D) depreciation is less than consumption 
A) depreciation is equal to investment 
B) depreciation is greater than investment 
C) depreciation is less than investment 
D) depreciation is less than consumption

Question 19

Output per worker   
= 4   
1/3,the saving rate is 30 percent,and the depreciation rate is 0.133.Calculate the steady-state values of capital per worker and consumption per worker.

Accepted Answer

The steady-state cap

Question 20

If output per worker in a steady state is $30,000,depreciation is 13%,the population growth rate is two percent,and the saving rate is 20%,what is the steady state capital-labor ratio?

Accepted Answer

A) $10,500 
B) $85,714 
C) $22,500 
D) $40,000 
A) $10,500 
B) $85,714 
C) $22,500 
D) $40,000

Exam 6: The Sources of Growth and the Solow Model

Figure 6.1 -According to Figure 6.1,in postwar U.S history ________.

If productivity is growing at some sustained rate g,then output and capital per worker ________.

In the past 50 years,per capita income in some countries such as ________ and ________ has hardly changed relative to per capita income in the United States.

Within rich economies,there is strong evidence of convergence ________.

In the Solow model,the faster growth of output that results from an increase in the saving rate is temporary,because ________.

Figure 6.1 -According to Figure 6.1,the average annual rate of growth of the U.S.economy in the period 1948-73 equalled ________.

Economic growth ________.

There are no questions for this section.

Given the production function Y = A if output grows by five percent,the capital input grows by five percent,and the labor input grows by two percent,calculate the Solow residual.Calculate the growth rates of output per worker and capital per worker.

The per-worker production function is ________.

The per-worker production function flattens out due to ________.

The Solow model suggests that economies with the same aggregate production function,ratio of workers to the total population and saving rates will ________.

In the Solow model,which of the following is an exogenous variable?

Productivity is ________.

On the Solow Diagram,an increase in productivity is shown by ________.

When an economy experiences a one-time increase in productivity,there is an increase in the long-run,steady state value of ________.

The growth accounting equation suggests that the growth rate of output is equal to the growth rate of ________.

If capital per-worker is rising,then ________.

Output per worker = 4 1/3,the saving rate is 30 percent,and the depreciation rate is 0.133.Calculate the steady-state values of capital per worker and consumption per worker.

If output per worker in a steady state is $30,000,depreciation is 13%,the population growth rate is two percent,and the saving rate is 20%,what is the steady state capital-labor ratio?

The Policy and Practice of Macroeconomics

Measuring Macroeconomic Data

Aggregate Production and Productivity

Saving and Investment in Closed and Open Economies

Money and Inflation

Drivers of Growth: Technology, policy, and Institutions

Business Cycles: an Introduction

The Is Curve

Monetary Policy and Aggregate Demand

Aggregate Supply and the Phillips Curve

The Aggregate Demand and Supply Model

Macroeconomic Policy and Aggregate Demand and Supply Analysis

The Financial System and Economic Growth

Financial Crises and the Economy

Fiscal Policy and the Government Budget

Exchange Rates and International Economic Policy

Consumption and Saving

Investment

The Labor Market, employment, and Unemployment

The Role of Expectations in Macroeconomic Policy

Modern Business Cycle Theory

Filters

In the past 50 years,per capita income in some countries such as and has hardly changed relative to per capita income in the United States.

Output per worker = 4 ^1/3,the saving rate is 30 percent,and the depreciation rate is 0.133.Calculate the steady-state values of capital per worker and consumption per worker.