Question 1

The marginal product of capital is:

Accepted Answer

A)    . 
B) the change in output for a unit change in capital. 
C) the slope of the production when technology and labour are held constant. 
D) all of the above. 
A)    . 
B) the change in output for a unit change in capital. 
C) the slope of the production when technology and labour are held constant. 
D) all of the above.

Question 2

World growth data reveals that from 1960 to 2011:

Accepted Answer

A) the US and other OECD countries stagnated. 
B) sub-Saharan African countries grew at low or negative rates. 
C) some countries particularly East Asian countries grew at low or negative rates. 
D) all of the above. 
A) the US and other OECD countries stagnated. 
B) sub-Saharan African countries grew at low or negative rates. 
C) some countries particularly East Asian countries grew at low or negative rates. 
D) all of the above.

Question 3

Saving is income that is not consumed.

Accepted Answer

A) True 
 B)False

Question 4

Figure 3.1  
-In Figure 3.1 the average product of capital is:

Accepted Answer

A) rising. 
B) constant. 
C) falling. 
D) unknown. 
A) rising. 
B) constant. 
C) falling. 
D) unknown.

Question 5

Growth accounting shows that GDP growth depends on:

Accepted Answer

A) growth of the capital stock. 
B) holding environmental pollution in check. 
C) government purchases. 
D) having a reasonable distribution of income. 
A) growth of the capital stock. 
B) holding environmental pollution in check. 
C) government purchases. 
D) having a reasonable distribution of income.

Question 6

The standard of living of people in a country is their per capita income.

Accepted Answer

A) True 
 B)False

Question 7

The Solow growth model shows that the growth rate of real GDP per worker depends on:

Accepted Answer

A) the saving rate, s 
B) the growth rate of the labour force, n. 
C) the depreciation rate,   . 
D) all of the above. 
A) the saving rate, s 
B) the growth rate of the labour force, n. 
C) the depreciation rate,   . 
D) all of the above.

Question 8

In the production function Y = A • F(K,L), L is:

Accepted Answer

A) leisure. 
B) labour. 
C) the marginal product of labour. 
D) the marginal product of leisure. 
A) leisure. 
B) labour. 
C) the marginal product of labour. 
D) the marginal product of leisure.

Question 9

What is a production function?

Accepted Answer

The relationship bet

Question 10

In a closed economy with no government sector, the change in the capital stock is:

Accepted Answer

A) net investment less depreciation. 
B) gross investment less depreciation. 
C) gross investment. 
D) nominal saving. 
A) net investment less depreciation. 
B) gross investment less depreciation. 
C) gross investment. 
D) nominal saving.

Question 11

Diminishing marginal product of capital (MPK) means:

Accepted Answer

A) output rises as capital rises. 
B) the MPK eventually falls as capital rises. 
C) output rises as the MPK rises. 
D) the marginal product of capital eventually becomes negative as capital rises. 
A) output rises as capital rises. 
B) the MPK eventually falls as capital rises. 
C) output rises as the MPK rises. 
D) the marginal product of capital eventually becomes negative as capital rises.

Question 12

In a closed economy with no government sector, the change in the capital stock is equal to:

Accepted Answer

A) net investment less depreciation. 
B) nominal saving. 
C) gross investment. 
D) real saving. 
A) net investment less depreciation. 
B) nominal saving. 
C) gross investment. 
D) real saving.

Question 13

In the Solow growth model the steady state is when the economy has:

Accepted Answer

A) full employment. 
B) the optimal capital labour ratio, k*. 
C) zero inflation. 
D) all of the above. 
A) full employment. 
B) the optimal capital labour ratio, k*. 
C) zero inflation. 
D) all of the above.

Question 14

In the steady state of the Solow growth model:

Accepted Answer

A)    
B)    
C)    
D)    
A)    
B)    
C)    
D)

Question 15

If the production function Y = A • (K,L) is divided by L, then

Accepted Answer

A) (Y/L) = A•f(K/L). 
B) output per capita equals technology times a function of the capital labour ratio. 
C) y = A•f(k). 
D) all of the above. 
A) (Y/L) = A•f(K/L). 
B) output per capita equals technology times a function of the capital labour ratio. 
C) y = A•f(k). 
D) all of the above.

Question 16

The Solow residual is that part of output growth attributed to:

Accepted Answer

A) the growth rate of the labour force. 
B) the growth rate of output. 
C) the growth rate of the capital stock. 
D) the grow rate of technology. 
A) the growth rate of the labour force. 
B) the growth rate of output. 
C) the growth rate of the capital stock. 
D) the grow rate of technology.

Question 17

What do constant returns to scale imply?

Accepted Answer

Constant returns to scale mean

Question 18

Real saving equals gross investment.

Accepted Answer

A) True 
 B)False

Question 19

If a country has a population of 300 million and a labour force of 200 million, then its labour force participation rate is:

Accepted Answer

A) 0.67 
B) 1.5 
C) 100 million. 
D) 200 million. 
A) 0.67 
B) 1.5 
C) 100 million. 
D) 200 million.

Question 20

Depreciation of the capital stock occurs due to:

Accepted Answer

A) deflation. 
B) vehicles requiring new parts. 
C) bonds falling in value. 
D) all of the above. 
A) deflation. 
B) vehicles requiring new parts. 
C) bonds falling in value. 
D) all of the above.

The marginal product of capital is:

World growth data reveals that from 1960 to 2011:

Saving is income that is not consumed.

Figure 3.1 -In Figure 3.1 the average product of capital is:

Growth accounting shows that GDP growth depends on:

The standard of living of people in a country is their per capita income.

The Solow growth model shows that the growth rate of real GDP per worker depends on:

In the production function Y = A • F(K,L), L is:

What is a production function?

In a closed economy with no government sector, the change in the capital stock is:

Diminishing marginal product of capital (MPK) means:

In a closed economy with no government sector, the change in the capital stock is equal to:

In the Solow growth model the steady state is when the economy has:

In the steady state of the Solow growth model:

If the production function Y = A • (K,L) is divided by L, then

The Solow residual is that part of output growth attributed to:

What do constant returns to scale imply?

Real saving equals gross investment.

If a country has a population of 300 million and a labour force of 200 million, then its labour force participation rate is:

Depreciation of the capital stock occurs due to:

Thinking About Macroeconomics

National-Income Accounting: Gross Domestic Product and the Price Level

Working With the Solow Growth Model

Conditional Convergence and Long-Run Economic Growth

Macroeconomics Without Microeconomic Foundations

Markets, Prices, Supply, and Demand

Consumption, Saving, and Investment

An Equilibrium Business-Cycle Model

Capital Utilization and Unemployment

The Demand for Money and the Price Level

Inflation, Money Growth, and Interest Rates

Government Expenditure

Taxes

Public Debt

Money and Business Cycles I: the Price-Misperceptions Model

Money and Business Cycles Ii: Sticky Prices and Nominal Wage Rates

World Markets in Goods and Credit

Exchange Rates

Filters

Exam 3: Introduction to Economic Growth

The marginal product of capital is:

World growth data reveals that from 1960 to 2011:

Saving is income that is not consumed.

Figure 3.1 -In Figure 3.1 the average product of capital is:

Growth accounting shows that GDP growth depends on:

The standard of living of people in a country is their per capita income.

The Solow growth model shows that the growth rate of real GDP per worker depends on:

In the production function Y = A • F(K,L), L is:

What is a production function?

In a closed economy with no government sector, the change in the capital stock is:

Diminishing marginal product of capital (MPK) means:

In a closed economy with no government sector, the change in the capital stock is equal to:

In the Solow growth model the steady state is when the economy has:

In the steady state of the Solow growth model:

If the production function Y = A • (K,L) is divided by L, then

The Solow residual is that part of output growth attributed to:

What do constant returns to scale imply?

Real saving equals gross investment.

If a country has a population of 300 million and a labour force of 200 million, then its labour force participation rate is:

Depreciation of the capital stock occurs due to:

Thinking About Macroeconomics

National-Income Accounting: Gross Domestic Product and the Price Level

Working With the Solow Growth Model

Conditional Convergence and Long-Run Economic Growth

Macroeconomics Without Microeconomic Foundations

Markets, Prices, Supply, and Demand

Consumption, Saving, and Investment

An Equilibrium Business-Cycle Model

Capital Utilization and Unemployment

The Demand for Money and the Price Level

Inflation, Money Growth, and Interest Rates

Government Expenditure

Taxes

Public Debt

Money and Business Cycles I: the Price-Misperceptions Model

Money and Business Cycles Ii: Sticky Prices and Nominal Wage Rates

World Markets in Goods and Credit

Exchange Rates

Filters