ECON 510 - Exam 3 (Final Exam) - Ch. 7
Growth in the Solow residual was fastest in the...
1960s
Growth in the Solow residual was slowest in the...
1970s
Compared to the United States, GDP per capita in the poorest countries is about...
2%
For the production function, Y=zK^(0.36)N^(0.64) , if measured output is Y^, measured capital input is K^, and measured labor input is N^, then the Solow residual would be equal to...
Y^/(K^^(0.36)N^^(0.64))
A steady state is...
a long-run equilibrium
Which of the following, if implemented in the Solow growth model, would not lead to a steady state?
a savings rate that increases as income increases
In the steady state of Solow's exogenous growth model, an increase in the growth rate of labor force...
decreases output per worker and decreases capital per worker
In an exogenous growth model, growth is caused by...
forces that are not explained by the model itself
In the steady state of Solow's exogenous growth model, an increase in the savings rate...
increases output per worker and increases capital per worker
In the steady state of Solow's exogenous growth model, an increase in total factor productivity...
increases output per worker and increases capital per worker
The saving rate has the following characteristic in Solow's exogenous growth model...
it is constant
According to Solow's exogenous growth theory, what happens to a country at steady state that suffered extensive capital destruction due to a war or climate event?
it will get back to its original status
All of the following increase total factor productivity except...
more capital
Which of the following increases total factor productivity?
new production procedures
The Golden Rule says that...
one should save something between A and B
Percentage deviations from trend in the Solow residual are...
procyclical and have about equal magnitude as percentage deviations from trend in GDP
Growth accounting, popularized by Robert Solow, attempts to attribute a change in aggregate output...
separately between changes in total factor productivity and changes in the supplies of factors of production
The per-worker production function relates output per worker...
to capital per worker
Which of the following is not a feature of the steady state in Solow's exogenous growth model?
total saving is steady
One plausible explanation of the U.S. productivity slowdown starting in 1973 is that it was the result of the time needed to adapt to new technology. This explanation would require that...
workers time at their jobs be diverted from production to learning the technology
Which feature of the data can the Solow growth model NOT replicate?
There is a widening gap between income levels across countries
Which of the following, if implemented in the Solow growth model, would not lead to a steady state?
a constant marginal product of capital
The biggest contribution to real U.S. GDP growth in the 1970s was due to growth in...
both the capital stock and the labor force
The Solow model emphasizes the role of which of the following factors of production?
capital
The rapid growth of output for the East Asian Growth Miracles was mostly due to...
capital accumulation
Suppose a poor economy inches toward the steady state in Solow's exogenous growth model. What happens?
capital grows faster than population
With an increase in total factor productivity in the Solow growth model...
the economy reaches a steady state with higher output
Suppose a poor economy inches toward the steady state in Solow's exogenous growth model. What happens?
the growth rate of output decreases
In Solow's exogenous growth model, the economy reaches a stable steady state because...
the marginal return of capital is decreasing
Suppose a country is much richer than others in the Solow growth model. What happens in the long run?
the other countries catch up to the rich one
If the population growth rate increases by the same percentage points as the depreciation rate, what happens to the steady-state, per-worker output in Solow's exogenous growth model?
It decreases
If the population growth rate increases by the same percentage points as the depreciation rate decreases, what happens to the steady-state, per-worker consumption in Solow's exogenous growth model?
It does not change
What happens to a poor economy in Solow's exogenous growth model?
Its saving per capita increases
In Solow's model of economic growth, suppose that "s" represents the savings rate, "z" represents total factor productivity, "k" represents the level of capital per worker, and "f(k)" represents the per-worker production function. Also suppose that "n" represents the population growth rate and "d" represents the depreciation rate of capital. The equilibrium level of capital per worker, "k*", will satisfy the equation...
szf(k*)=(n+d)k*
The biggest contribution to real GDP growth in the "East Asian Tigers" during the period 1966-1991 was due to growth in...
the capital stock
We can express the per-worker production function as a function of only per-worker capital thanks to...
the constant returns to scale
Suppose that two countries share identical levels of total factor productivity, identical labor force growth rates and identical savings rates. According to the Solow model...
the country with the smaller initial level of output per worker will grow more rapidly than the country with the greater initial level of output per worker
In Solow's exogenous growth model, the principal obstacle to continuous growth in output per capita is due to...
the declining marginal product of capital
On average, real GDP per capita in the United States increases by...
2%
If changes in economic policy could cause growth rate of real GDP to increase by 1% per year for 100 years, then GDP would be ___% higher after 100 years than it would have been otherwise.
2.7
The Golden Rule of capital accumulation maximizes the steady-state level of...
consumption per worker
In Solow's exogenous growth model, the steady-state growth rate of aggregate capital can be increased by...
higher population growth
In Solow's exogenous growth model, the steady-state growth rate of capital can be increased by...
higher population growth
In the solow growth model, countries with identical total factor productivities, identical labor force growth rates, and identical savings rates...
in equilibrium, have identical levels of capital per worker and output per worker
The slope of the output per worker function is equal to the...
marginal product of capital
In the Golden Rule steady state, the marginal product of capital is equal to the...
population growth rate plus the depreciation rate
With the Golden Rule...
savings maximize consumption
In the Solow growth model, the law of motion of capital takes into account...
the depreciation of old capital
The Solow residual attempts to measure the amount of output NOT explained by...
the direct contribution of labor and capital
