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.