Question 1

An example of open source software is:

Accepted Answer

A)  Linux 
B)  Mountain Lion 
C)  Win32 
D)  Red Hat 
E)  Hummingbird 
A)  Linux 
B)  Mountain Lion 
C)  Win32 
D)  Red Hat 
E)  Hummingbird A

Question 2

In the Romer model, if the population increases exogenously, the growth of knowledge stays constant.

Accepted Answer

A) True 
 B)False  False

Question 3

In growth accounting, the residual, gA, is so named because:

Accepted Answer

A)  the economy is complicated 
B)  economists know exactly what contributes to growth 
C)  it is a way to measure observed TFP growth 
D)  it is a way to measure unobserved TFP growth 
E)  it measures labor composition 
A)  the economy is complicated 
B)  economists know exactly what contributes to growth 
C)  it is a way to measure observed TFP growth 
D)  it is a way to measure unobserved TFP growth 
E)  it measures labor composition D

Question 4

Because there are no diminishing returns in the stock of ideas in the Romer model:

Accepted Answer

A)  old ideas continue to contribute to current economic growth 
B)  economic growth cannot be sustained forever 
C)  the economy eventually reaches a steady state 
D)  economic growth eventually slows 
E)  new ideas must be continually created 
A)  old ideas continue to contribute to current economic growth 
B)  economic growth cannot be sustained forever 
C)  the economy eventually reaches a steady state 
D)  economic growth eventually slows 
E)  new ideas must be continually created

Question 5

In the combined Solow-Romer model, long-run growth is sustained because of:

Accepted Answer

A)  population growth 
B)  capital accumulation 
C)  the nonrivalry of ideas 
D)  total factor productivity 
E)  no capital depreciation 
A)  population growth 
B)  capital accumulation 
C)  the nonrivalry of ideas 
D)  total factor productivity 
E)  no capital depreciation

Question 6

In the combined Solow-Romer model, the growth rate of total output, using the standard production function, is given as:

Accepted Answer

A)  $g _ { Y } = g _ { A }$ 
B)  $g _ { Y } = g _ { A } + ( 1 / 3 ) g _ { K } + ( 2 / 3 ) g _ { L Y }$ 
C)  $g _ { Y } = g _ { A } + ( 1 / 3 ) g _ { X }$ 
D)  $g _ { Y } = g _ { A } + g _ { K } + g _ { L Y }$ 
E)  $g _ { Y } = g _ { A } + g _ { K } 1 / 3 + g _ { L Y } 2 / 3$ 
A)  $g _ { Y } = g _ { A }$ 
B)  $g _ { Y } = g _ { A } + ( 1 / 3 ) g _ { K } + ( 2 / 3 ) g _ { L Y }$ 
C)  $g _ { Y } = g _ { A } + ( 1 / 3 ) g _ { X }$ 
D)  $g _ { Y } = g _ { A } + g _ { K } + g _ { L Y }$ 
E)  $g _ { Y } = g _ { A } + g _ { K } 1 / 3 + g _ { L Y } 2 / 3$

Question 7

In the growth accounting equation
 $g _ { Y } = ( 1 / 3 ) \left( g _ { X } - g _ { L } \right) + ( 2 / 3 ) \left( g _ { L Y } - g _ { L } \right) , ( 2 / 3 ) + g _ { A } , z _ { t } ; g _ { A }$ 
represents the growth rate of labor composition.

Accepted Answer

A) True 
 B)False

Question 8

In the Romer model, the more labor you dedicate to generating ideas, ________ but ________.

Accepted Answer

A)  the faster you accumulate knowledge; at a loss to current output in the consumption sector 
B)  the faster you accumulate knowledge; at a gain to current output in the consumption sector 
C)  the slower you accumulate knowledge; at a loss to current output in the consumption sector 
D)  the less you accumulate knowledge; at a gain to current output in the consumption sector 
E)  the more knowledge you lose; at a gain to current output in the consumption sector 
A)  the faster you accumulate knowledge; at a loss to current output in the consumption sector 
B)  the faster you accumulate knowledge; at a gain to current output in the consumption sector 
C)  the slower you accumulate knowledge; at a loss to current output in the consumption sector 
D)  the less you accumulate knowledge; at a gain to current output in the consumption sector 
E)  the more knowledge you lose; at a gain to current output in the consumption sector

Question 9

The amount of raw material in the universe-the amount of sand, oil, and the number of atoms of carbon, oxygen, etc.-is ________. The number of ways of arranging and using these raw materials is ________.

Accepted Answer

A)  finite; also finite 
B)  infinite; virtually infinite 
C)  finite; virtually infinite 
D)  virtually infinite; zero 
E)  zero; infinite 
A)  finite; also finite 
B)  infinite; virtually infinite 
C)  finite; virtually infinite 
D)  virtually infinite; zero 
E)  zero; infinite

Question 10

With monopolistic pricing, ________ are needed to generate ________.

Accepted Answer

A)  profits; capital 
B)  costs; capital 
C)  profits; new ideas 
D)  variable costs; total factor productivity 
E)  profits; total factor productivity 
A)  profits; capital 
B)  costs; capital 
C)  profits; new ideas 
D)  variable costs; total factor productivity 
E)  profits; total factor productivity

Question 11

The president of Tunisia asks you to suggest an idea to improve the economy's growth without worrying about decreasing returns. You suggest:

Accepted Answer

A)  paying a competitive wage 
B)  offering firms an incentive to produce new ideas 
C)  placing a higher tax on firms 
D)  removing legal protection for firms 
E)  None of these answers are correct. 
A)  paying a competitive wage 
B)  offering firms an incentive to produce new ideas 
C)  placing a higher tax on firms 
D)  removing legal protection for firms 
E)  None of these answers are correct.

Question 12

In the Romer model, the more labor you dedicate to generating ideas, the more slowly you accumulate knowledge, but at a loss to current output in the consumption sector.

Accepted Answer

A) True 
 B)False

Question 13

To get increasing returns to scale using the production function $Y _ { t } = A _ { t } K _ { t } ^ { 1 / 3 } L _ { t } ^ { 2 / 3 }$ , we need to replace total factor productivity with:

Accepted Answer

A)  more capital 
B)  the flow of ideas, At 
C)  the stock of ideas, At 
D)  the number 2 
E)  twice the factor productivity, $2 \times \bar { A }$ 
A)  more capital 
B)  the flow of ideas, At 
C)  the stock of ideas, At 
D)  the number 2 
E)  twice the factor productivity, $2 \times \bar { A }$

Question 14

In the combined Solow-Romer model, an exogenous increase in the saving rate:

Accepted Answer

A)  immediately increases the growth rate of per capita output, which eventually slows to its previous rate 
B)  immediately decreases the per capita output, but the growth rate does not change 
C)  increases the growth rate of per capita income, but eventually the economy reaches a new steady-state level of per capita output 
D)  immediately decreases the growth rate of per capita output, which eventually accelerates to a higher rate 
E)  has no impact on the growth rate or level of per capita output 
A)  immediately increases the growth rate of per capita output, which eventually slows to its previous rate 
B)  immediately decreases the per capita output, but the growth rate does not change 
C)  increases the growth rate of per capita income, but eventually the economy reaches a new steady-state level of per capita output 
D)  immediately decreases the growth rate of per capita output, which eventually accelerates to a higher rate 
E)  has no impact on the growth rate or level of per capita output

Question 15

Refer to the following table when answering  
Table 6.1: Growth Accounting
 $$\begin{array} { l | c c c c c } 
\hline \text { Growth (\%) } & 1948 - 2011 & 1948 - 1973 & 1973 - 1995 & 1995 - 2007 & 2007 - 2011 \
\hline K / L & 0.9 & 0.9 & 0.7 & 1.1 & 1.1 \
\text { Labor Comp } & 0.2 & 0.2 & 0.3 & 0.2 & 0.4 \
\text { TFP } & 1.4 & 2.2 & 0.5 & 1.5 & 0.4 \
\hline
\end{array}$$
-Consider the growth accounting data in Table 6.1. If the production function is given by $Y _ { t } = A _ { t } K _ { t } ^ { 1 / 4 } L _ { t } ^ { 3 / 4 }$ , the growth rate of per capita GDP for 1948-1973 is:

Accepted Answer

A) -1.7 percent 
B)  0.8 percent 
C)  1.1 percent 
D)  0.0 percent 
E)  2.6 percent 
A) -1.7 percent 
B)  0.8 percent 
C)  1.1 percent 
D)  0.0 percent 
E)  2.6 percent

Question 16

If Y is a good's output, X is spending to produce a good, $\bar { F }$ is the fixed cost associated with production, and C is the average cost of production, which of the following production functions exhibits increasing returns?

Accepted Answer

A)  $Y = ( C X - \bar { F } )$ 
B)  $Y = X + \bar { F } - C$ 
C)  $Y = ( \bar { F } - X ) / C$ 
D)  $Y = ( X - \bar { F } ) / C$ 
E)  $Y = ( X - \bar { F } C )$ 
A)  $Y = ( C X - \bar { F } )$ 
B)  $Y = X + \bar { F } - C$ 
C)  $Y = ( \bar { F } - X ) / C$ 
D)  $Y = ( X - \bar { F } ) / C$ 
E)  $Y = ( X - \bar { F } C )$

Question 17

For the years 2007-2011, if output per person in the private sector grew 1.9 percent, capital intensity grew 1.1 percent, and total factor productivity grew 0.2 percent, what was the growth rate of labor composition?

Accepted Answer

A)  0.4 percent 
B)  2.6 percent 
C)  3.4 percent 
D)  1.2 percent 
E)  1.3 percent 
A)  0.4 percent 
B)  2.6 percent 
C)  3.4 percent 
D)  1.2 percent 
E)  1.3 percent

Question 18

Suppose the parameters of the Romer model take the following values: $\bar { A } _ { 0 } = 10$ , $\bar { \ell } = 0.01 , \bar { z } = 1 / 500 \text {, and } \bar { L } = 10,000$
) What is the growth rate of this country?

Accepted Answer

A)  2 percent 
B)  20 percent 
C)  0.2 percent 
D)  10 percent 
E)  0.01 percent 
A)  2 percent 
B)  20 percent 
C)  0.2 percent 
D)  10 percent 
E)  0.01 percent

Question 19

Which of the following flowcharts best summarizes Romer's description of ideas and growth?

Accepted Answer

A)  Ideas $\to$Nonrivalry $\to$Increasing returns $\to$ Imperfect competition 
B)  Ideas $\to$ Capital $\to$ Constant returns $\to$ Imperfect competition 
C)  Capital $\to$ Rivalry $\to$ Increasing returns $\to$ Perfect competition 
D)  Ideas $\to$ Rivalry $\to$ Increasing returns $\to$ Perfect competition 
E)  Capital $\to$ Nonrivalry $\to$ Decreasing returns $\to$ Imperfect competition 
A)  Ideas $\to$Nonrivalry $\to$Increasing returns $\to$ Imperfect competition 
B)  Ideas $\to$ Capital $\to$ Constant returns $\to$ Imperfect competition 
C)  Capital $\to$ Rivalry $\to$ Increasing returns $\to$ Perfect competition 
D)  Ideas $\to$ Rivalry $\to$ Increasing returns $\to$ Perfect competition 
E)  Capital $\to$ Nonrivalry $\to$ Decreasing returns $\to$ Imperfect competition

Question 20

In the combined Solow-Romer model, an exogenous increase in the saving rate:

Accepted Answer

A)  pushes the economy to a lower per capita output balanced growth path 
B)  pushes the economy to a higher per capita output balanced growth path 
C)  pushes the economy's growth rate of per capita output to infinity 
D)  pushes the economy to a new steady-state level of per capita output 
E)  has no impact on the growth rate or level of per capita output 
A)  pushes the economy to a lower per capita output balanced growth path 
B)  pushes the economy to a higher per capita output balanced growth path 
C)  pushes the economy's growth rate of per capita output to infinity 
D)  pushes the economy to a new steady-state level of per capita output 
E)  has no impact on the growth rate or level of per capita output

An example of open source software is:

In the Romer model, if the population increases exogenously, the growth of knowledge stays constant.

In growth accounting, the residual, g_A, is so named because:

Because there are no diminishing returns in the stock of ideas in the Romer model:

In the combined Solow-Romer model, long-run growth is sustained because of:

In the combined Solow-Romer model, the growth rate of total output, using the standard production function, is given as:

In the growth accounting equation $g _ { Y } = ( 1 / 3 ) \left( g _ { X } - g _ { L } \right) + ( 2 / 3 ) \left( g _ { L Y } - g _ { L } \right) , ( 2 / 3 ) + g _ { A } , z _ { t } ; g _ { A }$ represents the growth rate of labor composition.

In the Romer model, the more labor you dedicate to generating ideas, but .

The amount of raw material in the universe-the amount of sand, oil, and the number of atoms of carbon, oxygen, etc.-is . The number of ways of arranging and using these raw materials is .

With monopolistic pricing, are needed to generate .

The president of Tunisia asks you to suggest an idea to improve the economy's growth without worrying about decreasing returns. You suggest:

In the Romer model, the more labor you dedicate to generating ideas, the more slowly you accumulate knowledge, but at a loss to current output in the consumption sector.

To get increasing returns to scale using the production function $Y _ { t } = A _ { t } K _ { t } ^ { 1 / 3 } L _ { t } ^ { 2 / 3 }$ , we need to replace total factor productivity with:

In the combined Solow-Romer model, an exogenous increase in the saving rate:

If Y is a good's output, X is spending to produce a good, $\bar { F }$ is the fixed cost associated with production, and C is the average cost of production, which of the following production functions exhibits increasing returns?

For the years 2007-2011, if output per person in the private sector grew 1.9 percent, capital intensity grew 1.1 percent, and total factor productivity grew 0.2 percent, what was the growth rate of labor composition?

Suppose the parameters of the Romer model take the following values: $\bar { A } _ { 0 } = 10$ , $\bar { \ell } = 0.01 , \bar { z } = 1 / 500 \text {, and } \bar { L } = 10,000$ ) What is the growth rate of this country?

Which of the following flowcharts best summarizes Romer's description of ideas and growth?

In the combined Solow-Romer model, an exogenous increase in the saving rate:

Introduction to Macroeconomics

Measuring the Macroeconomy

An Overview of Long-Run Economic Growth

A Model of Production

The Solow Growth Model

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 6: Growth and Ideas

An example of open source software is:

In the Romer model, if the population increases exogenously, the growth of knowledge stays constant.

In growth accounting, the residual, gA, is so named because:

Because there are no diminishing returns in the stock of ideas in the Romer model:

In the combined Solow-Romer model, long-run growth is sustained because of:

In the combined Solow-Romer model, the growth rate of total output, using the standard production function, is given as:

In the Romer model, the more labor you dedicate to generating ideas, ________ but ________.

The amount of raw material in the universe-the amount of sand, oil, and the number of atoms of carbon, oxygen, etc.-is ________. The number of ways of arranging and using these raw materials is ________.

With monopolistic pricing, ________ are needed to generate ________.

The president of Tunisia asks you to suggest an idea to improve the economy's growth without worrying about decreasing returns. You suggest:

In the Romer model, the more labor you dedicate to generating ideas, the more slowly you accumulate knowledge, but at a loss to current output in the consumption sector.

To get increasing returns to scale using the production function Yt=AtKt1/3Lt2/3Y _ { t } = A _ { t } K _ { t } ^ { 1 / 3 } L _ { t } ^ { 2 / 3 }Yt​=At​Kt1/3​Lt2/3​ , we need to replace total factor productivity with:

In the combined Solow-Romer model, an exogenous increase in the saving rate:

If Y is a good's output, X is spending to produce a good, Fˉ\bar { F }Fˉ is the fixed cost associated with production, and C is the average cost of production, which of the following production functions exhibits increasing returns?

For the years 2007-2011, if output per person in the private sector grew 1.9 percent, capital intensity grew 1.1 percent, and total factor productivity grew 0.2 percent, what was the growth rate of labor composition?

Which of the following flowcharts best summarizes Romer's description of ideas and growth?

In the combined Solow-Romer model, an exogenous increase in the saving rate:

Introduction to Macroeconomics

Measuring the Macroeconomy

An Overview of Long-Run Economic Growth

A Model of Production

The Solow Growth Model

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

In growth accounting, the residual, g_A, is so named because:

In the Romer model, the more labor you dedicate to generating ideas, but .

The amount of raw material in the universe-the amount of sand, oil, and the number of atoms of carbon, oxygen, etc.-is . The number of ways of arranging and using these raw materials is .

With monopolistic pricing, are needed to generate .

To get increasing returns to scale using the production function $Y _ { t } = A _ { t } K _ { t } ^ { 1 / 3 } L _ { t } ^ { 2 / 3 }$ , we need to replace total factor productivity with:

If Y is a good's output, X is spending to produce a good, $\bar { F }$ is the fixed cost associated with production, and C is the average cost of production, which of the following production functions exhibits increasing returns?