Question 1

The Solow model assumes the saving rate is:

Accepted Answer

A)  zero 
B)  constant 
C)  decreasing as income increases 
D)  increasing as income increases 
E)  larger as the interest rate rises 
A)  zero 
B)  constant 
C)  decreasing as income increases 
D)  increasing as income increases 
E)  larger as the interest rate rises

Question 2

An increase in ________ leads to a higher steady-state level of output, and an increase in ________ leads to a lower steady-state level of output.

Accepted Answer

A)  the saving rate; the depreciation rate 
B)  the saving rate; productivity 
C)  productivity; the initial capital stock 
D)  the depreciation rate; the labor stock 
E)  None of these answers are correct. 
A)  the saving rate; the depreciation rate 
B)  the saving rate; productivity 
C)  productivity; the initial capital stock 
D)  the depreciation rate; the labor stock 
E)  None of these answers are correct.

Question 3

Which of the following best answers whether growth in the labor force leads to overall economic growth?

Accepted Answer

A)  Population growth can produce growth in the Solow model in the aggregate but not in output per person. 
B)  Total capital and production per worker can grow as the population of the economy grows. 
C)  It never does-only capital contributes to aggregate economic growth. 
D)  Population growth can produce growth in the Solow model in the aggregate and in output per person. 
E)  Population growth increases output per person but not aggregate output. 
A)  Population growth can produce growth in the Solow model in the aggregate but not in output per person. 
B)  Total capital and production per worker can grow as the population of the economy grows. 
C)  It never does-only capital contributes to aggregate economic growth. 
D)  Population growth can produce growth in the Solow model in the aggregate and in output per person. 
E)  Population growth increases output per person but not aggregate output.

Question 4

In the Solow model, it is assumed a(n) ________ fraction of capital depreciates each period.

Accepted Answer

A)  zero 
B)  increasing 
C)  decreasing 
D)  constant 
E)  None of these answers are correct. 
A)  zero 
B)  increasing 
C)  decreasing 
D)  constant 
E)  None of these answers are correct.

Question 5

In the steady state, capital accumulation is zero.

Accepted Answer

A) True 
 B)False

The Solow model assumes the saving rate is:

An increase in leads to a higher steady-state level of output, and an increase in leads to a lower steady-state level of output.

Which of the following best answers whether growth in the labor force leads to overall economic growth?

In the Solow model, it is assumed a(n) ________ fraction of capital depreciates each period.

In the steady state, capital accumulation is zero.

Introduction to Macroeconomics

Measuring the Macroeconomy

An Overview of Long-Run Economic Growth

A Model of Production

Growth and Ideas

The Labor Market, Wages, and Unemployment

Inflation

An Introduction to the Short Run

The Great Recession: a First Look

The Is Curve

Monetary Policy and the Phillips Curve

Stabilization Policy and the Asad Framework

The Great Recession and the Short-Run Model

Dsge Models: the Frontier of Business Cycle Research

Consumption

Investment

The Government and the Macroeconomy

International Trade

Exchange Rates and International Finance

Parting Thoughts

Filters

Exam 5: The Solow Growth Model

The Solow model assumes the saving rate is:

An increase in ________ leads to a higher steady-state level of output, and an increase in ________ leads to a lower steady-state level of output.

Which of the following best answers whether growth in the labor force leads to overall economic growth?

In the Solow model, it is assumed a(n) ________ fraction of capital depreciates each period.

In the steady state, capital accumulation is zero.

Introduction to Macroeconomics

Measuring the Macroeconomy

An Overview of Long-Run Economic Growth

A Model of Production

Growth and Ideas

The Labor Market, Wages, and Unemployment

Inflation

An Introduction to the Short Run

The Great Recession: a First Look

The Is Curve

Monetary Policy and the Phillips Curve

Stabilization Policy and the Asad Framework

The Great Recession and the Short-Run Model

Dsge Models: the Frontier of Business Cycle Research

Consumption

Investment

The Government and the Macroeconomy

International Trade

Exchange Rates and International Finance

Parting Thoughts

Filters

An increase in leads to a higher steady-state level of output, and an increase in leads to a lower steady-state level of output.