Exam 9: Economic Growth II: Technology, Empirics, and Policy

Empirical studies about whether differences in income per person result from the differences in the quantities of the factors of production or the differences in the efficiency with which the factors are employed find that there is a positive correlation between the quantity of factors and the efficiency of use. Interpret this positive correlation.

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Question 81

The balanced growth property of the Solow growth model with population growth and technological progress predicts which of the following sets of variables will grow at the same rate in the steady state?

(Multiple Choice)

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Question 82

Total factor productivity may be measured by:

(Multiple Choice)

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Question 83

If the labor force is growing at a 3 percent rate and the efficiency of a unit of labor is growing at a 2 percent rate, then the number of effective workers is growing at a rate of:

(Multiple Choice)

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Question 84

A possible externality associated with the process of accumulating new capital is that:

(Multiple Choice)

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Question 85

The endogenous growth model's assumption of constant returns to capital is more plausible if capital is defined to include:

(Multiple Choice)

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Question 86

Conditional convergence occurs when economies converge to:

(Multiple Choice)

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Question 87

Use the data in the exhibit to complete a and b. Exhibit: Factors of Production Data Period Y K L Share of Labor in Output 1 100 200 100 0.5 1 106 205 102 0.5 3 111 210 104 0.5 4 110.5 215 104 0.5 5 110 220 104 0.5 a. Compute and report the value of growth in total factor productivity $( ( A t - A t - 1 ) / A t - 1 )$ in each period from periods 2 through 5 . If the value of A is 1.000 in period 1 , also report the value of A in each period. b. Does the value of A rise in each period? If it declines, do you think this decline is because technological progress works backward? If so, explain your answer. If not, provide another explanati on.

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Question 88

If the marginal product of capital net of depreciation equals 10 percent and the rate of population growth equals 2 percent, then this economy will be at the Golden Rule steady state if the rate of technological progress equals _____ percent.

(Multiple Choice)

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Question 89

In the two-sector endogenous growth model, the steady-state stock of physical capital is determined by _, and the growth in the stock of knowledge is determined by _.

(Multiple Choice)

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Question 90

If the marginal product of capital net depreciation equals 8 percent, the rate of growth of population equals 2 percent, and the rate of labor-augmenting technical progress equals 2 percent, to reach the Golden Rule level of the capital stock, the rate in this economy must be _.

(Multiple Choice)

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Question 91

The Solow model with population growth and labor-augmenting technological progress predicts balanced growth in the steady state. Growth rates of which variables are predicted to be balanced (i.e., will be equal) in the steady state?

(Essay)

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Question 92

The efficiency of labor:

(Multiple Choice)

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Question 93

Based on the Solow growth model with population growth and labor-augmenting technological progress, explain how each of the following policies would affect the steady-state level and steady-state growth rate of total output per person: a. a reduction in the government's budget deficit b. grants to support research and development c. tax incentives to increase private saving d. greater protection of private property rights

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Question 94

Suppose that technological change is not labor-augmenting, but affects only capital. Use the Solow growth model of Chapter 9 to graphically illustrate the impact of the slower rate of technological change that increases the rate at which capital wears out (the rate of depreciation increases) on the steady-state capital-labor ratio and the steady-state level of output per worker. Be sure to label the: a. axes; b. curves; c. initial steady-state levels; d. terminal steady-state levels; and e. the direction curves shift.

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Question 95

With population growth at rate n and labor-augmenting technological progress at rate g, the Golden Rule steady state requires that the marginal product of capital (MPK):

(Multiple Choice)

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Question 96

When capital increases by $\Delta$ K units, output increases by:

(Multiple Choice)

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Question 97

The Solow residual will fall even if technology has not changed if there is:

(Multiple Choice)

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Question 98

In the Solow growth model with population growth and technological change, the break-even level of investment must cover:

(Multiple Choice)

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Question 99

The Solow residual measures the portion of output growth that cannot be explained by growth in:

(Multiple Choice)

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Question 100

Showing 81 - 100 of 103

The balanced growth property of the Solow growth model with population growth and technological progress predicts which of the following sets of variables will grow at the same rate in the steady state?

Total factor productivity may be measured by:

If the labor force is growing at a 3 percent rate and the efficiency of a unit of labor is growing at a 2 percent rate, then the number of effective workers is growing at a rate of:

A possible externality associated with the process of accumulating new capital is that:

The endogenous growth model's assumption of constant returns to capital is more plausible if capital is defined to include:

Conditional convergence occurs when economies converge to:

If the marginal product of capital net of depreciation equals 10 percent and the rate of population growth equals 2 percent, then this economy will be at the Golden Rule steady state if the rate of technological progress equals _____ percent.

In the two-sector endogenous growth model, the steady-state stock of physical capital is determined by _, and the growth in the stock of knowledge is determined by _.

If the marginal product of capital net depreciation equals 8 percent, the rate of growth of population equals 2 percent, and the rate of labor-augmenting technical progress equals 2 percent, to reach the Golden Rule level of the capital stock, the rate in this economy must be _.

The Solow model with population growth and labor-augmenting technological progress predicts balanced growth in the steady state. Growth rates of which variables are predicted to be balanced (i.e., will be equal) in the steady state?

The efficiency of labor:

With population growth at rate n and labor-augmenting technological progress at rate g, the Golden Rule steady state requires that the marginal product of capital (MPK):

When capital increases by $\Delta$ K units, output increases by:

The Solow residual will fall even if technology has not changed if there is:

In the Solow growth model with population growth and technological change, the break-even level of investment must cover:

The Solow residual measures the portion of output growth that cannot be explained by growth in:

The Science of Macroeconomics

The Data of Macroeconomics

National Income: Where It Comes From and Where It Goes

The Monetary System: What It Is and How It Works

Inflation: Its Causes, Effects, and Social Costs

The Open Economy

Unemployment and the Labor Market

Economic Growth I: Capital Accumulation and Population Growth

Introduction to Economic Fluctuations

Aggregate Demand I: Building the Is-Lm Model

Aggregate Demand Ii: Applying the Is-Lm Model

The Open Economy Revisited: the Mundell-Fleming Model and the Exchange-Rate Regime

Aggregate Supply and the Short-Run Tradeoff Between Inflation and Unemployment

A Dynamic Model of Economic Fluctuations

Understanding Consumer Behavior

The Theory of Investment

Alternative Perspectives on Stabilization Policy

Government Debt and Budget Deficits

The Financial System: Opportunities and Dangers

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Exam 9: Economic Growth II: Technology, Empirics, and Policy

The balanced growth property of the Solow growth model with population growth and technological progress predicts which of the following sets of variables will grow at the same rate in the steady state?

Total factor productivity may be measured by:

If the labor force is growing at a 3 percent rate and the efficiency of a unit of labor is growing at a 2 percent rate, then the number of effective workers is growing at a rate of:

A possible externality associated with the process of accumulating new capital is that:

The endogenous growth model's assumption of constant returns to capital is more plausible if capital is defined to include:

Conditional convergence occurs when economies converge to:

If the marginal product of capital net of depreciation equals 10 percent and the rate of population growth equals 2 percent, then this economy will be at the Golden Rule steady state if the rate of technological progress equals _____ percent.

In the two-sector endogenous growth model, the steady-state stock of physical capital is determined by _____, and the growth in the stock of knowledge is determined by _____.

If the marginal product of capital net depreciation equals 8 percent, the rate of growth of population equals 2 percent, and the rate of labor-augmenting technical progress equals 2 percent, to reach the Golden Rule level of the capital stock, the ____ rate in this economy must be _____.

The Solow model with population growth and labor-augmenting technological progress predicts balanced growth in the steady state. Growth rates of which variables are predicted to be balanced (i.e., will be equal) in the steady state?

The efficiency of labor:

With population growth at rate n and labor-augmenting technological progress at rate g, the Golden Rule steady state requires that the marginal product of capital (MPK):

When capital increases by Δ\DeltaΔ K units, output increases by:

The Solow residual will fall even if technology has not changed if there is:

In the Solow growth model with population growth and technological change, the break-even level of investment must cover:

The Solow residual measures the portion of output growth that cannot be explained by growth in:

The Science of Macroeconomics

The Data of Macroeconomics

National Income: Where It Comes From and Where It Goes

The Monetary System: What It Is and How It Works

Inflation: Its Causes, Effects, and Social Costs

The Open Economy

Unemployment and the Labor Market

Economic Growth I: Capital Accumulation and Population Growth

Introduction to Economic Fluctuations

Aggregate Demand I: Building the Is-Lm Model

Aggregate Demand Ii: Applying the Is-Lm Model

The Open Economy Revisited: the Mundell-Fleming Model and the Exchange-Rate Regime

Aggregate Supply and the Short-Run Tradeoff Between Inflation and Unemployment

A Dynamic Model of Economic Fluctuations

Understanding Consumer Behavior

The Theory of Investment

Alternative Perspectives on Stabilization Policy

Government Debt and Budget Deficits

The Financial System: Opportunities and Dangers

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In the two-sector endogenous growth model, the steady-state stock of physical capital is determined by _, and the growth in the stock of knowledge is determined by _.

If the marginal product of capital net depreciation equals 8 percent, the rate of growth of population equals 2 percent, and the rate of labor-augmenting technical progress equals 2 percent, to reach the Golden Rule level of the capital stock, the rate in this economy must be _.

When capital increases by $\Delta$ K units, output increases by: