Question 1

An improvement in school quality translates into an increase in which model parameter?

Accepted Answer

A)  H 
B)  z 
C)  b 
D)  1-u 
A)  H 
B)  z 
C)  b 
D)  1-u C

Question 2

What characteristic of the endogenous growth model is crucial in giving the possibility of sustained growth?

Accepted Answer

A)  It is embodied in people. 
B)  It has constant returns to scale in production. 
C)  It takes time to accumulate it. 
D)  It grows at the same rate as consumption. 
A)  It is embodied in people. 
B)  It has constant returns to scale in production. 
C)  It takes time to accumulate it. 
D)  It grows at the same rate as consumption. B

Question 3

The idea that contact with others with high levels of human capital increases ones own human capital is called human capital

Accepted Answer

A)  contagion. 
B)  externality. 
C)  transference. 
D)  convergence. 
A)  contagion. 
B)  externality. 
C)  transference. 
D)  convergence. B

Question 4

In the endogenous growth model presented in the text,suppose that u represents the fraction of time spent working (as opposed to accumulating human capital),b represents the efficiency of human capital accumulation,H represents the amount of human capital,and z represents the marginal product of efficiency units of labor. Consumption equals

Accepted Answer

A)  buH. 
B)  zuH. 
C)  buz. 
D)  buzH. 
A)  buH. 
B)  zuH. 
C)  buz. 
D)  buzH.

Question 5

The endogenous growth model predicts that

Accepted Answer

A)  there is convergence in incomes per capita across countries. 
B)  output per capita is constant. 
C)  rich countries will always become poor. 
D)  differences in per capital incomes across countries persist forever. 
A)  there is convergence in incomes per capita across countries. 
B)  output per capita is constant. 
C)  rich countries will always become poor. 
D)  differences in per capital incomes across countries persist forever.

Question 6

Which of the following is best characterized as being nonrivalrous?

Accepted Answer

A)  consumption goods 
B)  services 
C)  physical capital 
D)  knowledge 
A)  consumption goods 
B)  services 
C)  physical capital 
D)  knowledge

Question 7

Convergence means that

Accepted Answer

A)  if poor countries grow fast, then fast growing countries are poor. 
B)  all countries grow at the same rate. 
C)  all countries tend towards the same per capita income. 
D)  the savings rate is positively related to per capita income. 
A)  if poor countries grow fast, then fast growing countries are poor. 
B)  all countries grow at the same rate. 
C)  all countries tend towards the same per capita income. 
D)  the savings rate is positively related to per capita income.

Question 8

Suppose a poor economy inches towards the steady state in Solow's exogenous growth model. What happens?

Accepted Answer

A)  Capital grows faster than population. 
B)  Capital grows slower than population. 
C)  Capital grows as fast as population. 
D)  It depends. 
A)  Capital grows faster than population. 
B)  Capital grows slower than population. 
C)  Capital grows as fast as population. 
D)  It depends.

Question 9

Which of the following is not a reason for differences in total factor productivity across countries?

Accepted Answer

A)  Differences in the size of population. 
B)  learning by doing. 
C)  barriers to the adoption of new technology. 
D)  inefficient allocation of factors of production across firms in some countries. 
A)  Differences in the size of population. 
B)  learning by doing. 
C)  barriers to the adoption of new technology. 
D)  inefficient allocation of factors of production across firms in some countries.

Question 10

Endogenous growth theory is about

Accepted Answer

A)  the welfare of indigenous people. 
B)  explaining growth. 
C)  studying fertility choices. 
D)  giving more importance to capital accumulation. 
A)  the welfare of indigenous people. 
B)  explaining growth. 
C)  studying fertility choices. 
D)  giving more importance to capital accumulation.

Question 11

In the endogenous growth model,human capital accumulation is best described as a form of

Accepted Answer

A)  consumption. 
B)  investment. 
C)  government spending. 
D)  none of the above 
A)  consumption. 
B)  investment. 
C)  government spending. 
D)  none of the above

Question 12

Schooling is subsidized in the United States in part

Accepted Answer

A)  so that the golden rule capital level can be reached. 
B)  because otherwise people would not get educated. 
C)  because there is a constitutional right to education. 
D)  because there is a positive externality from schooling. 
A)  so that the golden rule capital level can be reached. 
B)  because otherwise people would not get educated. 
C)  because there is a constitutional right to education. 
D)  because there is a positive externality from schooling.

Question 13

In the endogenous growth model presented in the text,suppose that u represents the fraction of time spent working (as opposed to accumulating human capital)and b represents the efficiency of human capital accumulation. The growth rate of human capital equals

Accepted Answer

A)  u(1 - b) - 1. 
B)  1 + b(1 - u). 
C)  (1 + b)(1 - u). 
D)  b(1 - u) - 1. 
A)  u(1 - b) - 1. 
B)  1 + b(1 - u). 
C)  (1 + b)(1 - u). 
D)  b(1 - u) - 1.

Question 14

A key characteristic of the production function in the endogenous growth model presented in the text is that

Accepted Answer

A)  there are increasing returns to scale in human capital. 
B)  there are decreasing returns to scale in human capital. 
C)  there are constant returns to scale in human capital. 
D)  at low levels of human capital, there are increasing returns to scale in human capital, while at high levels of human capital, there are decreasing returns to scale in human capital. 
A)  there are increasing returns to scale in human capital. 
B)  there are decreasing returns to scale in human capital. 
C)  there are constant returns to scale in human capital. 
D)  at low levels of human capital, there are increasing returns to scale in human capital, while at high levels of human capital, there are decreasing returns to scale in human capital.

Question 15

The Solow growth model tells us that the standard living in country A can be higher than in country B for all the following reasons,except

Accepted Answer

A)  country A has lower population growth than country B. 
B)  country A has a higher savings rate than country B. 
C)  country A has a higher depreciation rate than country B. 
D)  country A has higher total factor productivity than country B. 
A)  country A has lower population growth than country B. 
B)  country A has a higher savings rate than country B. 
C)  country A has a higher depreciation rate than country B. 
D)  country A has higher total factor productivity than country B.

Question 16

What is a characteristic of human capital?

Accepted Answer

A)  rivalry 
B)  rapid accumulation 
C)  private ownership 
D)  concavity 
A)  rivalry 
B)  rapid accumulation 
C)  private ownership 
D)  concavity

Question 17

When countries converge,

Accepted Answer

A)  they all grow at the same rate. 
B)  poorer ones grow faster. 
C)  richer ones grow faster. 
D)  richer ones do not grow. 
A)  they all grow at the same rate. 
B)  poorer ones grow faster. 
C)  richer ones grow faster. 
D)  richer ones do not grow.

Question 18

In the endogenous growth model presented in the text,an increase in the fraction of time accumulating human capital

Accepted Answer

A)  increases the growth rate of human capital and increases the growth rate of output. 
B)  increases the growth rate of human capital and decreases the growth rate of output. 
C)  decreases the growth rate of human capital and increases the growth rate of output. 
D)  decreases the growth rate of human capital and decreases the growth rate of output. 
A)  increases the growth rate of human capital and increases the growth rate of output. 
B)  increases the growth rate of human capital and decreases the growth rate of output. 
C)  decreases the growth rate of human capital and increases the growth rate of output. 
D)  decreases the growth rate of human capital and decreases the growth rate of output.

Question 19

In the endogenous growth model,an increase in a worker's level of human capital

Accepted Answer

A)  increases the amount of additional human capital she can produce, but does not increase the amount of output she can produce. 
B)  increases the amount of additional output she can produce, but does not increase the amount of human capital she can produce. 
C)  increases both the amount of additional human capital she can produce and the amount of output she can produce. 
D)  increases neither the amount of additional human capital she can produce nor the amount of output she can produce. 
A)  increases the amount of additional human capital she can produce, but does not increase the amount of output she can produce. 
B)  increases the amount of additional output she can produce, but does not increase the amount of human capital she can produce. 
C)  increases both the amount of additional human capital she can produce and the amount of output she can produce. 
D)  increases neither the amount of additional human capital she can produce nor the amount of output she can produce.

Question 20

Suppose that two countries share identical levels of total factor productivity,identical labor force growth rates and identical savings rates. According to the Solow model

Accepted Answer

A)  the country with the greater initial level of output per worker will grow more rapidly than the country with the smaller initial level of output per worker. 
B)  the country with the smaller initial level of output per worker will grow more rapidly than the country with the greater initial level of output per worker. 
C)  both countries will have the same growth rates of output per worker, even if they start out with different levels of output per worker. 
D)  if both countries start out with different levels of income per worker, both countries may have different growth rates of output per worker, but we cannot be certain which country will have the higher growth rate of output per worker. 
A)  the country with the greater initial level of output per worker will grow more rapidly than the country with the smaller initial level of output per worker. 
B)  the country with the smaller initial level of output per worker will grow more rapidly than the country with the greater initial level of output per worker. 
C)  both countries will have the same growth rates of output per worker, even if they start out with different levels of output per worker. 
D)  if both countries start out with different levels of income per worker, both countries may have different growth rates of output per worker, but we cannot be certain which country will have the higher growth rate of output per worker.

An improvement in school quality translates into an increase in which model parameter?

What characteristic of the endogenous growth model is crucial in giving the possibility of sustained growth?

The idea that contact with others with high levels of human capital increases ones own human capital is called human capital

The endogenous growth model predicts that

Which of the following is best characterized as being nonrivalrous?

Convergence means that

Suppose a poor economy inches towards the steady state in Solow's exogenous growth model. What happens?

Which of the following is not a reason for differences in total factor productivity across countries?

Endogenous growth theory is about

In the endogenous growth model,human capital accumulation is best described as a form of

Schooling is subsidized in the United States in part

In the endogenous growth model presented in the text,suppose that u represents the fraction of time spent working (as opposed to accumulating human capital)and b represents the efficiency of human capital accumulation. The growth rate of human capital equals

A key characteristic of the production function in the endogenous growth model presented in the text is that

The Solow growth model tells us that the standard living in country A can be higher than in country B for all the following reasons,except

What is a characteristic of human capital?

When countries converge,

In the endogenous growth model presented in the text,an increase in the fraction of time accumulating human capital

In the endogenous growth model,an increase in a worker's level of human capital

Suppose that two countries share identical levels of total factor productivity,identical labor force growth rates and identical savings rates. According to the Solow model

Introduction

Measurement

Business Cycle Measurement

Consumer and Firm Behavior: The Work-Leisure Decision and Profit Maximization

A Closed-Economy One-Period Macroeconomic Model

Search and Unemployment

Economic Growth: Malthus and Solow

A Two-Period Model: The Consumption-Savings Decision and Credit Markets

Credit Market Imperfections: Credit Frictions, Financial Crises, and Social Security

A Real Intertemporal Model with Investment

Money, Banking, Prices, and Monetary Policy

Business Cycle Models with Flexible Prices and Wages

New Keynesian Economics: Sticky Prices

International Trade in Goods and Assets

Money in the Open Economy

Money, Inflation, and Banking

Inflation, the Phillips Curve, and Central Bank Commitment

Filters

Exam 8: Income Disparity Among Countries and Endogenous Growth

An improvement in school quality translates into an increase in which model parameter?

What characteristic of the endogenous growth model is crucial in giving the possibility of sustained growth?

The idea that contact with others with high levels of human capital increases ones own human capital is called human capital

The endogenous growth model predicts that

Which of the following is best characterized as being nonrivalrous?

Convergence means that

Suppose a poor economy inches towards the steady state in Solow's exogenous growth model. What happens?

Which of the following is not a reason for differences in total factor productivity across countries?

Endogenous growth theory is about

In the endogenous growth model,human capital accumulation is best described as a form of

Schooling is subsidized in the United States in part

In the endogenous growth model presented in the text,suppose that u represents the fraction of time spent working (as opposed to accumulating human capital)and b represents the efficiency of human capital accumulation. The growth rate of human capital equals

A key characteristic of the production function in the endogenous growth model presented in the text is that

The Solow growth model tells us that the standard living in country A can be higher than in country B for all the following reasons,except

What is a characteristic of human capital?

When countries converge,

In the endogenous growth model presented in the text,an increase in the fraction of time accumulating human capital

In the endogenous growth model,an increase in a worker's level of human capital

Suppose that two countries share identical levels of total factor productivity,identical labor force growth rates and identical savings rates. According to the Solow model

Introduction

Measurement

Business Cycle Measurement

Consumer and Firm Behavior: The Work-Leisure Decision and Profit Maximization

A Closed-Economy One-Period Macroeconomic Model

Search and Unemployment

Economic Growth: Malthus and Solow

A Two-Period Model: The Consumption-Savings Decision and Credit Markets

Credit Market Imperfections: Credit Frictions, Financial Crises, and Social Security

A Real Intertemporal Model with Investment

Money, Banking, Prices, and Monetary Policy

Business Cycle Models with Flexible Prices and Wages

New Keynesian Economics: Sticky Prices

International Trade in Goods and Assets

Money in the Open Economy

Money, Inflation, and Banking

Inflation, the Phillips Curve, and Central Bank Commitment

Filters