Question 1

In the long run,a reduction in productivity will cause

Accepted Answer

A)  an increase in the capital-labor ratio and an increase in consumption per worker.
B)  an increase in the capital-labor ratio and a decrease in consumption per worker.
C)  a decrease in the capital-labor ratio and a decrease in consumption per worker.
D)  a decrease in the capital-labor ratio and an increase in consumption per worker.E) A) and C)
F) All of the above

Question 2

Describe the main ideas of endogenous growth theory.What does it have to say about the role of government in economic growth?

Accepted Answer

Endogenous growth theory explains the ma...

Question 3

An increase in population growth will lead to a ________ in the steady-state capital-labor ratio and a ________ in output per worker.

Accepted Answer

A)  fall; fall
B)  fall; rise
C)  rise; rise
D)  rise; fallE) A) and B)
F) A) and C)

Question 4

Over the past year,an economy's labor supply increased from 100 to 102,its capital stock increased from 1000 to 1030,and its output increased from 500 to 525.All measurements are in real terms.Calculate the contributions to economic growth of growth in capital,labor,and productivity if aK = 0.2 and aN = 0.8.

Accepted Answer

?A/A = ?Y/Y - aK ?K/K - aN ?N/N
= 5% -...

Question 5

Total factor productivity growth is that part of economic growth due to

Accepted Answer

A)  capital growth plus labor growth.
B)  capital growth less labor growth.
C)  capital growth times labor growth.
D)  neither capital growth nor labor growth.E) B) and C)
F) None of the above

Question 6

In the long run,an increase in the saving rate in a steady-state economy will cause

Accepted Answer

A)  an increase in the capital-labor ratio and an increase in consumption per worker.
B)  an increase in the capital-labor ratio and a decrease in consumption per worker.
C)  a decrease in the capital-labor ratio and a decrease in consumption per worker.
D)  a decrease in the capital-labor ratio and an increase in consumption per worker.E) A) and B)
F) A) and C)

Question 7

A decrease in population growth will lead to a ________ in the steady-state capital-labor ratio and a ________ in output per worker.

Accepted Answer

A)  fall; fall
B)  fall; rise
C)  rise; rise
D)  rise; fallE) A) and B)
F) None of the above

Question 8

Over the past year,output grew 5%,capital grew 5%,and labor grew 1%.If the elasticities of output with respect to capital and labor are 0.5 and 0.5,respectively,how much did productivity grow?

Accepted Answer

A)  0) 5%
B)  1) 0%
C)  1) 5%
D)  2) 0%E) B) and C)
F) B) and D) D

Question 9

Suppose the current level of output is 5000 and the elasticity of output with respect to labor is 0.7.A 10% increase in labor would increase the current level of output to

Accepted Answer

A)  5035.
B)  5070.
C)  5350.
D)  5700.E) None of the above
F) C) and D)

Question 10

A country has the per-worker production function  
yt = 6,
where yt is output per worker and kt is the capital-labor ratio.The depreciation rate is 0.1 and the population growth rate is 0.1.The saving function is
St = 0.1Yt,
where St is total national saving and Yt is total output.
(a)What is the steady-state value of capital-labor ratio?
(b)What is the steady-state value of output per worker?
(c)What is the steady-state value of consumption per worker?

Accepted Answer

(a)sf(k)= (n + d)k,so 0.1 × 6 ...

Question 11

Over the past year,output grew 6%,capital grew 2%,and labor grew 4%.If the elasticities of output with respect to capital and labor are 0.3 and 0.7,respectively,how much did productivity grow?

Accepted Answer

A)  2) 0%
B)  2) 6%
C)  3) 0%
D)  3) 3%E) C) and D)
F) A) and B)

Question 12

In the Solow model,if saving per worker initially exceeds investment per worker,

Accepted Answer

A)  the economy will experience inflation.
B)  the capital-labor ratio will increase.
C)  investment per worker will decline.
D)  saving per worker will decline.E) All of the above
F) None of the above A

Question 13

In the Solow model,if productivity doesn't change,

Accepted Answer

A)  the economy must eventually reach a steady state.
B)  the capital-labor ratio must decline.
C)  the capital-labor ratio must rise.
D)  there can be no saving.E) A) and D)
F) None of the above

Question 14

Which of the following is not an example of human capital formation?

Accepted Answer

A)  Increases in the educational achievements of the population
B)  Increases in job skills of the labor force
C)  Improvements in the nutrition and health of the labor force
D)  Increases in the birth rate of the populationE) All of the above
F) A) and B)

Question 15

Suppose the current level of output is 5000.A 10% increase in productivity would increase the current level of output to

Accepted Answer

A)  5050.
B)  5100.
C)  5500.
D)  6000.E) C) and D)
F) All of the above

Question 16

In the Solow model,if f(k) = 2k0.5,s = 0.1,n = 0.1,and d = 0.05,what is the value of f(k) at equilibrium?

Accepted Answer

A)  2/3
B)  4/3
C)  2
D)  8/3E) A) and C)
F) B) and C)

Question 17

The computerization of police departments throughout the country has greatly reduced the crime rate.What macroeconomic variable is likely to be directly affected by this change?

Accepted Answer

A)  Productivity
B)  Inflation
C)  The real interest rate
D)  The trade deficitE) A) and D)
F) None of the above A

Question 18

Over the past year,output grew 4%,capital grew 2%,and labor grew 1%.If the elasticities of output with respect to capital and labor are 0.3 and 0.7,respectively,how much did productivity grow?

Accepted Answer

A)  2) 0%
B)  2) 7%
C)  3) 0%
D)  3) 3%E) A) and B)
F) C) and D)

Question 19

Steady state consumption per worker is

Accepted Answer

A)  larger in the short run than in the long run.
B)  less than steady state investment per worker.
C)  less than steady state saving per worker.
D)  steady state production per worker minus steady state investment per worker.E) B) and C)
F) C) and D)

Question 20

In the textbook model of endogenous growth,in equilibrium,output grows at the rate of

Accepted Answer

A)  sA - d.
B)  n + d.
C)  K) 
D)  
A)  E) None of the above
F) All of the above

Exam 6: Long-Run Economic Growth

In the long run,a reduction in productivity will cause

Correct Answer
verified

Describe the main ideas of endogenous growth theory.What does it have to say about the role of government in economic growth?

Correct Answer
verified
Endogenous growth theory explains the ma...
View Answer

An increase in population growth will lead to a in the steady-state capital-labor ratio and a in output per worker.

Correct Answer
verified

Correct Answer
verified

?A/A = ?Y/Y - aK ?K/K - aN ?N/N
= 5% -...
View Answer

Total factor productivity growth is that part of economic growth due to

Correct Answer
verified

In the long run,an increase in the saving rate in a steady-state economy will cause

Correct Answer
verified

A decrease in population growth will lead to a in the steady-state capital-labor ratio and a in output per worker.

Correct Answer
verified

Over the past year,output grew 5%,capital grew 5%,and labor grew 1%.If the elasticities of output with respect to capital and labor are 0.5 and 0.5,respectively,how much did productivity grow?

Correct Answer
verified
D

Suppose the current level of output is 5000 and the elasticity of output with respect to labor is 0.7.A 10% increase in labor would increase the current level of output to

Correct Answer
verified

Correct Answer
verified
(a)sf(k)= (n + d)k,so 0.1 × 6 ...
View Answer

Over the past year,output grew 6%,capital grew 2%,and labor grew 4%.If the elasticities of output with respect to capital and labor are 0.3 and 0.7,respectively,how much did productivity grow?

Correct Answer
verified

In the Solow model,if saving per worker initially exceeds investment per worker,

Correct Answer
verified
A

In the Solow model,if productivity doesn't change,

Correct Answer
verified

Which of the following is not an example of human capital formation?

Correct Answer
verified

Suppose the current level of output is 5000.A 10% increase in productivity would increase the current level of output to

Correct Answer
verified

In the Solow model,if f(k) = 2k0.5,s = 0.1,n = 0.1,and d = 0.05,what is the value of f(k) at equilibrium?

Correct Answer
verified

The computerization of police departments throughout the country has greatly reduced the crime rate.What macroeconomic variable is likely to be directly affected by this change?

Correct Answer
verified
A

Over the past year,output grew 4%,capital grew 2%,and labor grew 1%.If the elasticities of output with respect to capital and labor are 0.3 and 0.7,respectively,how much did productivity grow?

Correct Answer
verified

Steady state consumption per worker is

Correct Answer
verified

In the textbook model of endogenous growth,in equilibrium,output grows at the rate of

Correct Answer
verified

Exam 6: Long-Run Economic Growth

In the long run,a reduction in productivity will cause

Correct AnswerverifiedShow Answer

Describe the main ideas of endogenous growth theory.What does it have to say about the role of government in economic growth?

Correct AnswerverifiedEndogenous growth theory explains the ma...View AnswerShow Answer

An increase in population growth will lead to a ________ in the steady-state capital-labor ratio and a ________ in output per worker.

Correct AnswerverifiedShow Answer

Correct Answerverified ?A/A = ?Y/Y - aK ?K/K - aN ?N/N= 5% -...View AnswerShow Answer

Total factor productivity growth is that part of economic growth due to

Correct AnswerverifiedShow Answer

In the long run,an increase in the saving rate in a steady-state economy will cause

Correct AnswerverifiedShow Answer

A decrease in population growth will lead to a ________ in the steady-state capital-labor ratio and a ________ in output per worker.

Correct AnswerverifiedShow Answer

Over the past year,output grew 5%,capital grew 5%,and labor grew 1%.If the elasticities of output with respect to capital and labor are 0.5 and 0.5,respectively,how much did productivity grow?

Correct AnswerverifiedD

Suppose the current level of output is 5000 and the elasticity of output with respect to labor is 0.7.A 10% increase in labor would increase the current level of output to

Correct AnswerverifiedShow Answer

Correct Answerverified(a)sf(k)= (n + d)k,so 0.1 × 6 ...View AnswerShow Answer

Over the past year,output grew 6%,capital grew 2%,and labor grew 4%.If the elasticities of output with respect to capital and labor are 0.3 and 0.7,respectively,how much did productivity grow?

Correct AnswerverifiedShow Answer

In the Solow model,if saving per worker initially exceeds investment per worker,

Correct AnswerverifiedA

In the Solow model,if productivity doesn't change,

Correct AnswerverifiedShow Answer

Which of the following is not an example of human capital formation?

Correct AnswerverifiedShow Answer

Suppose the current level of output is 5000.A 10% increase in productivity would increase the current level of output to

Correct AnswerverifiedShow Answer

In the Solow model,if f(k) = 2k0.5,s = 0.1,n = 0.1,and d = 0.05,what is the value of f(k) at equilibrium?

Correct AnswerverifiedShow Answer

The computerization of police departments throughout the country has greatly reduced the crime rate.What macroeconomic variable is likely to be directly affected by this change?

Correct AnswerverifiedA

Over the past year,output grew 4%,capital grew 2%,and labor grew 1%.If the elasticities of output with respect to capital and labor are 0.3 and 0.7,respectively,how much did productivity grow?

Correct AnswerverifiedShow Answer

Steady state consumption per worker is

Correct AnswerverifiedShow Answer

In the textbook model of endogenous growth,in equilibrium,output grows at the rate of

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified
Endogenous growth theory explains the ma...
View Answer

An increase in population growth will lead to a in the steady-state capital-labor ratio and a in output per worker.

Correct Answer
verified

Correct Answer
verified

?A/A = ?Y/Y - aK ?K/K - aN ?N/N
= 5% -...
View Answer

Correct Answer
verified

Correct Answer
verified

A decrease in population growth will lead to a in the steady-state capital-labor ratio and a in output per worker.

Correct Answer
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Correct Answer
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D

Correct Answer
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Correct Answer
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(a)sf(k)= (n + d)k,so 0.1 × 6 ...
View Answer

Correct Answer
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Correct Answer
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A

Correct Answer
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Correct Answer
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A

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