Econ Final Growth Model Review

*The Solow model emphasizes the role of which of the following factors of production?*

capital

*The Golden Rule of capital accumulation maximizes the steady-state level of*

consumption per worker.

*In more modern times as opposed to the times of Malthus, higher standards of living appear to*

decrease death rates and also decrease birth rates.

*In an exogenous growth model, growth is caused by*

forces that are not explained by the model itself.

*In the Malthusian model, improvements in health care lead to*

higher population and lower per-capita production.

*All of the following increase total factor productivity except*

more capital.

*Which of the following increases total factor productivity?*

new production procedures

*If an epidemic hits a Malthusian economy, the long-term consequence is*

no change in the standard of living.

*If the savings rate falls in the Solow growth model*

per worker output falls in the steady state.

*In the Golden Rule steady state, the marginal product of capital is equal to the*

population growth rate plus the depreciation rate.

*In the Malthusian model, the population growth rate is*

positively related to consumption per worker.

*The Malthusian model performs poorly in explaining economic growth after the*

Industrial Revolution.

*In a Malthusian world, why is misery recurrent?*

Mortality depends on the standard of living.

*The idea that an improvement in technology causes an increase in population but causes no increase in the average standard of living is attributed to*

Thomas Malthus.

*Which of the following is not a feature of the steady state in Solow's exogenous growth model?*

Total saving is steady.

*A steady state is*

a long-run equilibrium.

*In a Malthusian world, what event would improve temporarily the standard of living, as measured by output per capita?*

an increase in violent crime

*In a Malthusian world, what would improve the standard of living permanently?*

birth control

*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.

*In the Malthusian model, an improvement in the technology of growing food is likely to*

increase the equilibrium size of the population and have no effect on the equilibrium level of consumption per worker.

*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.

*In Solow's exogenous growth model, the economy reaches a stable steady state because*

the marginal return of capital is decreasing.

*We can use a per-worker production function in the Malthusian model because*

the production function has constant returns to scale.

*There is evidence that income per worker is converging in*

the richest countries, but not the poorest countries.

*The Solow growth model can account for*

why richer countries have higher investment rates.

*Growth in the Solow residual was fastest in the*

1960s.

*Since 1900, real GDP per capita in the United States has increased by*

2% per year.

*Which of the following, if implemented in the Solow growth model, would not lead to a steady state?*

A constant marginal product of capital.

*Malthus was wrong in what sense?*

He did not predict the high rates of future growth in standards of living.

*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.

*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.

*The Solow residual attempts to measure the amount of output not explained by*

the direct contribution of labor and capital.

*If changes in economic policy could cause the 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

*In the Malthusian model, state-mandated population control policies are likely to*

decrease the equilibrium size of the population and increase the equilibrium level of consumption per worker.

*In the Malthusian model of economic growth, an increase in the quantity of land*

has no effect on steady state per capita consumption, and increases the steady state population.

*In Solow's exogenous growth model, the steady-state growth rate of capital can be increased by*

higher population growth.

*The saving rate has the following characteristic in Solow's exogenous growth model*

it is constant.

*It is useful to study the Solow growth model because*

it is useful in understanding the sources of economic growth after 1800.

*The slope of the output per worker function is equal to the*

marginal product of capital.

*Recent evidence suggests that output per worker is*

positively related to the rate of investment and negatively related to the rate of population growth.

*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^

*In the Solow growth model, long run growth in the standard of living is propelled by*

technological change.

*In the Malthusian model, population growth is endogenous because*

the birth and death rates are endogenous.

*We can express the per-worker production function as a function of only per-worker capital thanks to*

the constant returns to scale.