Chapter 12

Suppose output per worker in a country has grown at the same rate as technology over for many years. This country's growth would be described as

"balanced" growth

At equilibrium in the growth model with technological progress, the growth rate of output equals

(g_A + g_N)

Use the following information to answer the question below: (1) the rate of depreciation is 10% per year, (2) the population growth rate is 2% per year, and (3) the growth rate of technology is 3% per year. Which of the following represents the level of investment needed to maintain constant capital per effective worker in this economy?

.15K

Once the economy has achieved balanced growth, the growth rate of K/NA is

0

Suppose that the rate of depreciation is 5% per year, the population growth rate is 4% per year, and the growth rate of technology is 2% per year. Then the growth rate of output per worker is

2%

Use the following information to answer the question below: (1) the rate of depreciation is 10% per year, (2) the population growth rate is 2% per year, and (3) the growth rate of technology is 3% per year. Which of the following represents the steady-state growth rate of output per worker in this economy?

3%

Use the following information to answer the question below: (1) the rate of depreciation is 10% per year, (2) the population growth rate is 2% per year, and (3) the growth rate of technology is 3% per year. Which of the following equals the annual growth rate of "effective labor" in the steady state in this economy?

5%

Use the following information to answer the question below: (1) the rate of depreciation is 10% per year, (2) the population growth rate is 2% per year, and (3) the growth rate of technology is 3% per year. Which of the following represents the steady-state growth rate of output in this economy?

5%

Suppose that the rate of depreciation is 5% per year, the population growth rate is 4% per year, and the growth rate of technology is 2% per year. Then the annual growth rate of "effective labor" in the steady state in this economy is

6%

Suppose that the rate of depreciation is 5% per year, the population growth rate is 4% per year, and the growth rate of technology is 2% per year. Then the steady-state growth rate of output is

6%

Which of the following will cause a reduction in the steady-state growth rate of output per worker?

A reduction in the rate of technological progress

Which of the following represents a dimension of technological progress? a) Larger quantities of output for given quantities of capital and labor b) A larger variety of products c) New and/or better products

All of the above

Which of the following represents the fertility of research?

How R&D spending translates into new ideas

In the growth model allowing for technological change in chapter 12, the equilibrium condition is:

I/AN = sf(K/AN) , where I/AN = (s+g_A + g_N) K/AN

In the production function Y = f(K, NA),Y=f(K,NA),Y=f(K,NA), for a given state of technology, constant returns to scale implies that output will increase by 7% when

K and N increase by 7%

Which of the following is NOT constant when balanced growth is obtained?

NA

Which of the following best describes a situation where research is considered relatively fertile?

Research that translates into many new products

Once the economy has achieved balanced growth,

S/NA = (s + g_A +g_N) K/NA

Which of the following represents the appropriability of research?

The extent to which firms benefit from the results of their own R&D spending

Which of the following is true after an economy reaches a balanced growth equilibrium?

The growth rate of capital is equal to the growth rate of the effective work force

Which of the following is constant when balanced growth is achieved?

Y / NA

Countries with low standards of living can catch up to countries with higher standards of living by

accumulating capital

In the following production function, Y/NA = f(K/NA), an increase in A represents

an increase in effective labor

Which of the following will cause an increase in output per effective worker?

an increase in the saving rate

[Note: Questions 13-16 are variations of the same question -- the difference is in what is increasing/decreasing.] Which of the following will cause an increase in output per effective worker?

an increase in the saving rate, a decrease in population growth, a decrease in the rate of depreciation, a decrease in the rate of technological progress.

At equilibrium in the growth model with technological progress, the growth rate of output per worker, i.e. the growth in the standard of living, is

g_A

At equilibrium in the growth model with technological progress, the growth rate of output per worker, i.e. the growth in the standard of living, is (equation)

g_A

Once the economy has achieved balanced growth, output per effective worker is

growing at a rate of 0

Once the economy has achieved balanced growth, output per worker is

growing at a rate of g_A

Once the economy has achieved balanced growth, output is

growing at a rate of g_A + g_N

Once the economy has achieved balanced growth, the capital stock is

growing at a rate of g_A + g_N

Two ways that countries with low standards of living can catch up to countries with higher standards of living are

improving their technology and accumulating capital

Patent protection is important for technological progress because it makes research and development

more appropriable

The equilibrium condition for the growth model allowing for technological change in chapter 12 says that

savings per effective worker equals the amount of investment that is needed to keep the capital stock per effective worker constant

Suppose the production function is written as Y/AN = f(K/AN). Then equal and successive increases in K/AN will cause

smaller and smaller increases in output

High growth in the rich countries from 1950 to 2009 was most likely due to

technological progress

In the following production function, Y = f(K, NA),Y=f(K,NA),Y=f(K,NA), suppose A increases by 20%. This 20% increase in A implies that (TEQOLHIB20%)

the effective quantity of labor has increased by 20%

At equilibrium in the growth model with technological progress, the growth rate of output per worker, i.e. that growth in the standard of living, is

the growth rate of technological progress

At equilibrium in the growth model with technological progress, the growth rate of output equals (non-equation)

the population growth rate plus the growth rate of technological progress

In the following production function, Y = f(K, NA),Y=f(K,NA),Y=f(K,NA), suppose A increases by 20%. This 20% increase in A implies that

the same output can be produced with 20% less labor