HW 6

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

A constant marginal product of capital.

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

higher population growth.

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

it is constant.

Percentage deviations from trend in the Solow residual are

procyclical and have about equal magnitude as percentage deviations from trend in GDP.

The per-worker production function relates output per worker

to capital per worker.

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.

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

Total saving is steady.

For the production function, Y = zK N , if measured output is Y, measured capital input is K, ^ and measured labor input is N, then the Solow residual would be equal to

^0.36^0.64.

A steady state is

a long-run equilibrium.

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.

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

higher population growth.

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

population growth rate plus the depreciation rate.

On average, real GDP per capita in the United States increases by

2%

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

2.7%

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

consumption per worker.

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 total factor productivity

increases output per worker and increases capital per worker.

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

marginal product of capital.

All of the following increase total factor productivity except

more capital.

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

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.

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.

In the Solow growth model, the law of motion of capital takes into account

the depreciation of old capital.

With an increase in total factor productivity in the Solow growth model,

the economy reaches a steady state with higher output.