Econ 359 Midterm 2
Countries in which a relatively small fraction of output is channeled into investment tend to have a
relatively low standard of living
In the Solow growth model, the law of motion of capital takes into account
the deprecation of old capital
The per worker production function relates output per worker
to capital 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 the steady state of Solow's exogenous growth model, an increase in the savings rate
increass output per worker and increase capital per worker
Total factor productivity can be influenced by
new inventions
The idea that an improvement in technology causes an increase in population but cause no increase in the average standard of living is attributed to
Thomas Malthus
Before the industrial revolution, standards of living differed
little over time and across countries
The slope of the output per worker function is equal to the
marginal product of capital
the golden rule savings rate is achieved when capital is accumulated at a rate that
maximizes consumption per worker in the steady state
Rates of growth of real per capita income are most alike amongst
the richest countries but not the poorest countries
If changed 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
The Solow model emphasizes the role of which of the following factors of production
capital
The Golden Rule Quantity of capital per worker maximizes the steady state level of
consumption per worker
Growth in the real GDP per capita in Canada is roughly consistent with which of the following predictions of the Solow model?
exogenous TFP growth at a constant rate
In an endogenous growth model, growth is caused by
forces determined by the model
In an exogenous growth model, growth is caused by
forces that are bit explained by the model itself
In the Solow growth model
higher population growth implies a lower standard of living
A pessimistic long run Malthusian result is
improvements in technology does not improve standards of living
The Malthusian model had the property that
improvements in technology for producing goods leads to increased population growth
Recent evidence suggests that the level of output per worker is
not correlated with the growth rate in output per worker
The per worker production function describes the relationship between
output per worker and land per worker
In the Malthusian model, the population growth rate is
positively related to consumption per worker
Recent evidence suggests that output per worker is
positively related to the rate of investment and negatively related to the rate of population growth
The Solow model suggest that, to improve a country's standard of living in the long run
production technology must become more efficient
The Solow growth model predicts that a country's standard of living can continue to increase in the long run only if
there is sustained increaes in total factor productivity
An increase in savings can be brought about
through government policy
In the Malthusian model, population growth depends on
consumption per worker
The Malthusian model performs poorly in explaining economic growth after the
Industrial Revolution
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
