Question 1

Let α represent labor's share of total output.The Solow residual is,therefore,represented by

Accepted Answer

A) αgy. 
B) αgA. 
C) αgK. 
D) αgN. 
E) 1 / α. 
A) αgy. 
B) αgA. 
C) αgK. 
D) αgN. 
E) 1 / α. B

Question 2

In the following production function,Y = f(K,NA),a 20% increase in A will cause which of the following variables to increase by 20%?

Accepted Answer

A) labor 
B) effective labor 
C) output 
D) output per worker 
E) none of the above 
A) labor 
B) effective labor 
C) output 
D) output per worker 
E) none of the above B

Question 3

High growth in the rich countries from 1950 to 2009 was most likely due to

Accepted Answer

A) a high savings rate. 
B) high capital accumulation. 
C) technological progress. 
D) high consumption rates. 
E) monetary policy. 
A) a high savings rate. 
B) high capital accumulation. 
C) technological progress. 
D) high consumption rates. 
E) monetary policy. C

Question 4

Assume that an economy experiences both positive population growth and technological progress.Once the economy has achieved balanced growth,we know that the output per worker ratio (K / N)is

Accepted Answer

A) constant. 
B) growing at a rate of gA - gN. 
C) growing at a rate of gN. 
D) growing at a rate of gA. 
E) growing at a rate of δ + gA + gN. 
A) constant. 
B) growing at a rate of gA - gN. 
C) growing at a rate of gN. 
D) growing at a rate of gA. 
E) growing at a rate of δ + gA + gN.

Question 5

Which of the following will cause an increase in output per effective worker?

Accepted Answer

A) an increase in population growth 
B) an increase in the rate of depreciation 
C) a reduction in the saving rate 
D) an increase in the rate of technological progress 
E) an increase in the saving rate 
A) an increase in population growth 
B) an increase in the rate of depreciation 
C) a reduction in the saving rate 
D) an increase in the rate of technological progress 
E) an increase in the saving rate

Question 6

Suppose there is an increase in the saving rate.Explain what effect this increase in the saving rate will have on the rate of growth of output per worker.

Accepted Answer

As described in answers for the previous

Question 7

Assume that an economy experiences both positive population growth and technological progress.Once the economy has achieved balanced growth,we know that the capital per worker ratio (K / N)is

Accepted Answer

A) constant. 
B) growing at a rate of gA - gN. 
C) growing at a rate of gN. 
D) growing at a rate of gA. 
E) growing at the same rate as Y / N. 
A) constant. 
B) growing at a rate of gA - gN. 
C) growing at a rate of gN. 
D) growing at a rate of gA. 
E) growing at the same rate as Y / N.

Question 8

Suppose policy makers pass a budget that results in a reduction in the budget deficit.Also assume that this fiscal policy action results in an increase in the saving rate.To what extent will this increase in the saving rate cause permanent changes in the rate of growth of output per worker? Explain.

Accepted Answer

A budget that causes a reduction in the

Question 9

Technological progress has played a very important role in China's economic growth.Where does the technological progress in China come from?

Accepted Answer

There are two major channels.First,China

Question 10

Which of the following will cause a reduction in the steady-state growth rate of output per worker?

Accepted Answer

A) a reduction in the saving rate 
B) an increase in the population growth rate 
C) an increase in the rate of depreciation 
D) an increase in the saving rate 
E) none of the above 
A) a reduction in the saving rate 
B) an increase in the population growth rate 
C) an increase in the rate of depreciation 
D) an increase in the saving rate 
E) none of the above

Question 11

Assume that an economy experiences both positive population growth and technological progress.Once the economy has achieved balanced growth,we know that the capital per effective worker ratio (K / NA)is

Accepted Answer

A) growing at a rate of δ + gA + gN. 
B) growing at a rate of gA + gN. 
C) growing at a rate of gN. 
D) growing at a rate of gA. 
E) none of the above 
A) growing at a rate of δ + gA + gN. 
B) growing at a rate of gA + gN. 
C) growing at a rate of gN. 
D) growing at a rate of gA. 
E) none of the above

Question 12

Graphically illustrate and explain the effects of an increase in the saving rate on the Solow growth model.In your answer,you must clearly label all curves and the initial and final equilibria.In your answer,explain what happens to the rate of growth of output per worker and the rate of growth of output as the economy adjusts to this increase in the saving rate.

Accepted Answer

The graph is easy.The saving rate increa

Question 13

To what extent can changes in the rate of technological progress cause permanent changes in the rate of growth of output per worker? Explain.

Accepted Answer

For example,an increase in the rate of T

Question 14

Refer to the information above.Which of the following represents the level of investment needed to maintain a constant capital stock (K)in this economy?

Accepted Answer

A) .02K 
B) .03K 
C) .05K 
D) .10K 
E) .15K 
A) .02K 
B) .03K 
C) .05K 
D) .10K 
E) .15K

Question 15

Refer to the information above.Which of the following represents the steady-state growth rate of output per worker in this economy?

Accepted Answer

A) 2% 
B) 3% 
C) 5% 
D) 10% 
E) 15% 
A) 2% 
B) 3% 
C) 5% 
D) 10% 
E) 15%

Question 16

The evidence shows that,over the last 25 years,spending on research and development in the rich countries has

Accepted Answer

A) decreased dramatically. 
B) decreased slightly. 
C) remained constant. 
D) increased in absolute numbers,but decreased as a percentage of GDP. 
E) increased as a percentage of GDP. 
A) decreased dramatically. 
B) decreased slightly. 
C) remained constant. 
D) increased in absolute numbers,but decreased as a percentage of GDP. 
E) increased as a percentage of GDP.

Question 17

Convergence of output per capita across countries has come from

Accepted Answer

A) a convergence of saving rates. 
B) a convergence of the accumulation of capital. 
C) higher technological progress from the countries that started behind. 
D) all of the above 
A) a convergence of saving rates. 
B) a convergence of the accumulation of capital. 
C) higher technological progress from the countries that started behind. 
D) all of the above

Question 18

Discuss several of the hypotheses concerning the reduction in productivity growth in the mid-1970s.

Accepted Answer

Answers can include:

Question 19

Graphically illustrate and explain the effects of an increase in population growth on the Solow growth model.In your answer,you must clearly label all curves and the initial and final equilibria.In your answer,explain what happens to the rate of growth of output per worker and the rate of growth of output as the economy adjusts to this increase in population growth.

Accepted Answer

An increase in the rate of population gr

Question 20

In the production function Y = f(K,NA),for a given state of technology,constant returns to scale implies that output (Y)will increase by 7% when

Accepted Answer

A) K or NA increase by 7%. 
B) K and N increase by 7%. 
C) N or A increase by 7%. 
D) N and A increase by 7%. 
E) all of the above 
A) K or NA increase by 7%. 
B) K and N increase by 7%. 
C) N or A increase by 7%. 
D) N and A increase by 7%. 
E) all of the above

Exam 12: Technological Progress and Growth

Let α represent labor's share of total output.The Solow residual is,therefore,represented by

In the following production function,Y = f(K,NA),a 20% increase in A will cause which of the following variables to increase by 20%?

High growth in the rich countries from 1950 to 2009 was most likely due to

Assume that an economy experiences both positive population growth and technological progress.Once the economy has achieved balanced growth,we know that the output per worker ratio (K / N)is

Which of the following will cause an increase in output per effective worker?

Suppose there is an increase in the saving rate.Explain what effect this increase in the saving rate will have on the rate of growth of output per worker.

Assume that an economy experiences both positive population growth and technological progress.Once the economy has achieved balanced growth,we know that the capital per worker ratio (K / N)is

Technological progress has played a very important role in China's economic growth.Where does the technological progress in China come from?

Which of the following will cause a reduction in the steady-state growth rate of output per worker?

Assume that an economy experiences both positive population growth and technological progress.Once the economy has achieved balanced growth,we know that the capital per effective worker ratio (K / NA)is

To what extent can changes in the rate of technological progress cause permanent changes in the rate of growth of output per worker? Explain.

Refer to the information above.Which of the following represents the level of investment needed to maintain a constant capital stock (K)in this economy?

Refer to the information above.Which of the following represents the steady-state growth rate of output per worker in this economy?

The evidence shows that,over the last 25 years,spending on research and development in the rich countries has

Convergence of output per capita across countries has come from

Discuss several of the hypotheses concerning the reduction in productivity growth in the mid-1970s.

In the production function Y = f(K,NA),for a given state of technology,constant returns to scale implies that output (Y)will increase by 7% when

A Tour of the World

A Tour of the Book

The Goods Market

Financial Markets

Goods and Financial Marketsthe Is-Lm Model

The Labor Market

Putting All Markets Togetherthe As-Ad Model

The Phillips Curve,the Natural Rate of Unemployment,and Inflation

The Crisis

The Facts of Growth

Saving,capital Accumulation,and Output

Technological Progress: the Short,the Medium,and the Long Run

Expectations: the Basic Tools

Financial Markets and Expectations

Expectations,consumption,and Investment

Expectations,output,and Policy

Openness in Goods and Financial Markets

The Goods Market in an Open Economy

Output,the Interest Rate,and the Exchange Rate

Exchange Rate Regimes

Should Policy Makers Be Restrained

Fiscal Policy: a Summing up

Monetary Policy: a Summing up

Epilogue: the Story of Macroeconomics

an Introduction to National Income and Product Accounts

an Introduction to Econometrics

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