Exam 8: Economic Growth I: Capital Accumulation and Population Growth

If a war destroys a large portion of a country's capital stock but the saving rate is unchanged, the Solow model predicts that output will grow and that the new steady state will approach:

When an economy begins below the Golden Rule, reaching the Golden Rule:

The Solow model shows that a key determinant of the steady-state ratio of capital to labor is the:

In the Solow growth model of Chapter 8, where s is the saving rate, y is output per worker, and i is investment per worker, consumption per worker (c) equals:

In the Solow growth model with no population growth and no technological progress, the higher the steady capital-per-worker ratio, the higher the steady-state:

According to the Kremerian model, large populations improve living standards because:

If an economy is in a steady state with a saving rate below the Golden Rule level, efforts to increase the saving rate result in:

Among the four countries-the United States, the United Kingdom, Germany, and Japan-the one that experienced the most rapid growth rate of output per person between 1948 and 1972 was:

A reduction in the saving rate starting from a steady state with more capital than the Golden Rule causes investment to ______ in the transition to the new steady state.

Suppose that two countries are exactly alike in every respect except that population grows at a faster rate in country A than in country B. a. Which country will have the higher level of output per worker in the steady state? Illustrate graphically. b. Which country will have the faster rate of growth of output per worker in the steady state?

When an economy reaches a steady state other than the Golden Rule, what actions should the policy makers take to achieve the Golden Rule steady state when: a. The economy begins with more capital than in the Golden Rule steady state b. The economy begins with less capital than in the Golden Rule steady state

The Solow model with population growth but no technological change cannot explain persistent growth in standards of living because:

If an economy is in a steady state with no population growth or technological change and the capital stock is above the Golden Rule level and the saving rate falls:

Exhibit: Output, Consumption, and Investment In this graph, when the capital-labor ratio is OA, AB represents:

In the Solow growth model, the assumption of constant returns to scale means that:

In the Solow growth model with population growth but no technological progress, increases in capital have a positive impact on steady-state consumption per worker by _____, but have a negative impact on steady-state consumption per worker by _____.

Exhibit: Steady-State Capital-Labor Ratio In this graph, the capital-labor ratio that represents the steady-state capital-ratio is:

Starting from a steady-state situation, if the saving rate increases, the rate of growth of capital per worker will:

The economy of Alpha can be described by the Solow growth model. The following are some characteristics of the Alpha economy: saving rate (s) 0.20 depreciati on rate ( ) 0.12 steady-state capital per worker ( k) 4 populati on growth rate (n) 0.02 steady-state output per worker 20,000 a. What is the steady-state growth rate of output per worker in Alpha? b. What is the steadv-state growth rate of total output in } Alpha ? c.What is the level of steady-state consumption per worker in Alpha? d. What is the steady-state level of investment per worker in Alpha?

Analysis of population growth around the world concludes that countries with high population growth tend to: