Question 1

Figure 6.1  
-According to Figure 6.1,the period from 1974 to 1995 is particularly remarkable for the slow growth of ________.

Accepted Answer

A) output per worker 
B) labor input 
C) output 
D) capital input 
A) output per worker 
B) labor input 
C) output 
D) capital input

Question 2

When an economy experiences a one-time increase in productivity,there is an immediate increase in ________.

Accepted Answer

A) the saving rate 
B) the capital-labor ratio 
C) the depreciation rate 
D) consumption per worker 
A) the saving rate 
B) the capital-labor ratio 
C) the depreciation rate 
D) consumption per worker

Question 3

Population growth is similar to depreciation,in that ________.

Accepted Answer

A) each lowers the capital-labor ratio 
B) each tends to encourage saving 
C) capital wears out faster when used by more workers 
D) each helps to explain how economies can sustain a positive growth rate of output 
A) each lowers the capital-labor ratio 
B) each tends to encourage saving 
C) capital wears out faster when used by more workers 
D) each helps to explain how economies can sustain a positive growth rate of output

Question 4

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

Accepted Answer

A) an upward shift of the depreciation line 
B) an upward shift of the investment function 
C) an upward shift of the per-worker production function 
D) a downward shift of the investment function 
A) an upward shift of the depreciation line 
B) an upward shift of the investment function 
C) an upward shift of the per-worker production function 
D) a downward shift of the investment function

Question 5

If investment per-worker equals some value X,and depreciation per-worker equals some value Z,then the change in the capital stock per-worker is equal to ________.

Accepted Answer

A) X+Z 
B) X-Z 
C) X times Z 
D) X divided by Z 
A) X+Z 
B) X-Z 
C) X times Z 
D) X divided by Z

Question 6

National output is a function of ________.

Accepted Answer

A) capital and saving 
B) technology,employment and demand 
C) labor and depreciation 
D) labor,technology and capital 
A) capital and saving 
B) technology,employment and demand 
C) labor and depreciation 
D) labor,technology and capital

Question 7

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 8

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 9

"Capital dilution" refers to ________.

Accepted Answer

A) the flow of investment in the "bathtub model" 
B) the depreciation of capital associated with an increase in the percentage of younger workers 
C) the decline in the marginal product of capital that results from reliance on new,inexperienced workers 
D) the decrease in capital per worker that is a direct consequence of an increase in the number of workers 
A) the flow of investment in the "bathtub model" 
B) the depreciation of capital associated with an increase in the percentage of younger workers 
C) the decline in the marginal product of capital that results from reliance on new,inexperienced workers 
D) the decrease in capital per worker that is a direct consequence of an increase in the number of workers

Question 10

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 11

According to the Solow model,a benefit of policies to limit population growth might be ________.

Accepted Answer

A) that smaller families are more likely to contribute to technological advances 
B) that smaller families have better access to birth control methods and devices 
C) that smaller families might provide each person a larger share of national income 
D) that smaller families have less need to save,and so enjoy higher consumption 
A) that smaller families are more likely to contribute to technological advances 
B) that smaller families have better access to birth control methods and devices 
C) that smaller families might provide each person a larger share of national income 
D) that smaller families have less need to save,and so enjoy higher consumption

Question 12

On the Solow Diagram,an increase in population growth 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) an upward shift of the per-worker production function 
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) an upward shift of the per-worker production function 
D) a downward shift of the investment function

Question 13

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 14

The highest rate of U.S.growth was recorded in which of the following periods?

Accepted Answer

A) 1948-73 
B) 1967-83 
C) 1974-95 
D) 1996-2008 
A) 1948-73 
B) 1967-83 
C) 1974-95 
D) 1996-2008

Question 15

In theory,differences in output across economies and over time might be the result of differences in either capital input,labor input,or productivity.The evidence points clearly to productivity as a more likely and powerful source of growth differences.Which aspects of the Solow growth model help to explain why the inputs of capital and labor contribute little to growth of output,relative to productivity?

Accepted Answer

Diminishing marginal product undermines

Question 16

With a closed economy and no government spending,the total demand for output is equal to ________.

Accepted Answer

A) consumption per-worker plus investment per-worker 
B) consumption per-worker minus investment per-worker 
C) consumption per-worker times investment per-worker 
D) consumption per worker divided by investment per-worker 
A) consumption per-worker plus investment per-worker 
B) consumption per-worker minus investment per-worker 
C) consumption per-worker times investment per-worker 
D) consumption per worker divided by investment per-worker

Question 17

Figure 6.1  
-According to Figure 6.1,the period from 1996 to 2011 is particularly remarkable for the rapid growth of ________.

Accepted Answer

A) productivity 
B) labor input 
C) output 
D) capital input 
A) productivity 
B) labor input 
C) output 
D) capital input

Question 18

In a steady-state economy with no population growth,output per worker is 35,the saving rate is 20 percent,and the depreciation rate is 11 percent.The level of capital per worker is ________.

Accepted Answer

A) 64 
B) 19 
C) 39 
D) 28 
A) 64 
B) 19 
C) 39 
D) 28

Question 19

If depreciation is equal to investment ________.

Accepted Answer

A) capital per-worker rises over time 
B) capital per-worker is stable 
C) capital per-worker falls over time 
D) capital per worker equals saving 
A) capital per-worker rises over time 
B) capital per-worker is stable 
C) capital per-worker falls over time 
D) capital per worker equals saving

Question 20

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

Exam 6: The Sources of Growth and the Solow Model

Figure 6.1 -According to Figure 6.1,the period from 1974 to 1995 is particularly remarkable for the slow growth of ________.

When an economy experiences a one-time increase in productivity,there is an immediate increase in ________.

Population growth is similar to depreciation,in that ________.

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

If investment per-worker equals some value X,and depreciation per-worker equals some value Z,then the change in the capital stock per-worker is equal to ________.

National output is a function of ________.

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

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

"Capital dilution" refers to ________.

Productivity is ________.

According to the Solow model,a benefit of policies to limit population growth might be ________.

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

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 ________.

The highest rate of U.S.growth was recorded in which of the following periods?

With a closed economy and no government spending,the total demand for output is equal to ________.

Figure 6.1 -According to Figure 6.1,the period from 1996 to 2011 is particularly remarkable for the rapid growth of ________.

In a steady-state economy with no population growth,output per worker is 35,the saving rate is 20 percent,and the depreciation rate is 11 percent.The level of capital per worker is ________.

If depreciation is equal to investment ________.

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 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