Exam 8: Why Do Economies Grow

If Julie expects that her salary will increase by 10 percent per year, how many years will it take for her salary to double?

Describe how new growth theory explains the impact of comprehensive education in a developing country.

If the population of Country A is 400 and the real GDP per capita of Country A is $200,000 , then the GDP in country A is:

-Refer to Table 8.3. Diminishing returns to capital most obviously occur between periods _______ and _______.

If total output grows at 4 percent per year while labor and capital grow at 1.5 percent and 2.1 percent pre year, respectively, then:

Innovations that come about through inventive activity designed specifically to reduce costs is known as:

According to the Solow Model, a higher depreciation rate will always result in a decrease in output.

In order to increase the size of markets, and so promote faster technological innovation, countries could:

Explain why policymakers would want to increase the saving rate if they are concerned about economic growth.

Recall Application 4, "Growth Accounting and Information Technology," to answer the following questions: -According to the application, the increased productivity due to higher investment in computer technology is

Figure 8.1 -Refer to Figure 8.1. If the saving rate is s2, the economy reaches the long run equilibrium at:

Figure 8.1 -Refer to Figure 8.1 If the saving rate is s1, and the economy currently has K3 level of capital. Which of the following is true?

Figure 8.1 -Refer to Figure 8.1. What will happen to the long run equilibrium if the economy changes saving rates from s1 to s2?

In an open economy, a country can accelerate growth by:

According to the Solow Model, a country with a higher level of income always has a higher consumption level.

If the capital stock remains fixed while the supply of labor increases, it is likely that:

In growth accounting, the three sources of growth for a country are:

If a county has a growth rate of approximately 0.7 percent each year, it will take about:

Human capital increases when the economy experiences a higher birth rate.

If Canadian income grows at a rate of 2 percent per year and French income grows at a rate of 3 percent each year, it will take about 35 years for Canadian income to double, but only 23 years for French income to double.