Question 1

According to the Solow model, differences in standards of living across countries is explained by

Accepted Answer

A) different barriers to technology adoption. 
B) differences in labour supply. 
C) different steady states. 
D) differences in total factor productivity. 
E) differences in population growth. 
A) different barriers to technology adoption. 
B) differences in labour supply. 
C) different steady states. 
D) differences in total factor productivity. 
E) differences in population growth.

Question 2

If a larger fraction of the population receives public education, and a smaller fraction receives private education, then

Accepted Answer

A) there will be a higher rate of convergence of incomes across the population. 
B) aggregate growth rates must fall in the long run. 
C) for each individual there should be a smaller effect on human capital accumulation due to the human capital of others. 
D) human capital will grow at a higher rate for everyone. 
E) inefficiency must increase. 
A) there will be a higher rate of convergence of incomes across the population. 
B) aggregate growth rates must fall in the long run. 
C) for each individual there should be a smaller effect on human capital accumulation due to the human capital of others. 
D) human capital will grow at a higher rate for everyone. 
E) inefficiency must increase.

Question 3

A key characteristic of the production function in the endogenous growth model presented in the text is that

Accepted Answer

A) there are constant returns to scale in human capital. 
B) there are decreasing returns to scale in human capital. 
C) at low levels of human capital, there are increasing returns to scale in human capital, while at high levels of human capital, there are decreasing returns to scale in human capital. 
D) there are increasing returns to scale in human capital. 
E) there are substantial diminishing marginal returns to human capital. 
A) there are constant returns to scale in human capital. 
B) there are decreasing returns to scale in human capital. 
C) at low levels of human capital, there are increasing returns to scale in human capital, while at high levels of human capital, there are decreasing returns to scale in human capital. 
D) there are increasing returns to scale in human capital. 
E) there are substantial diminishing marginal returns to human capital.

Question 4

The importance of barriers to the adoption of technologies is supported by research by

Accepted Answer

A) P. Romer. 
B) R. Lucas. 
C) G. Glomm and B. Ravikumar. 
D) Friedman and Lucas. 
E) S. Parente and E. Prescott. 
A) P. Romer. 
B) R. Lucas. 
C) G. Glomm and B. Ravikumar. 
D) Friedman and Lucas. 
E) S. Parente and E. Prescott.

Question 5

Barriers to Riches, by S. Parente and E. Prescott, emphasizes the importance of

Accepted Answer

A) public education. 
B) barriers to technological adoption. 
C) free trade. 
D) endogenous growth. 
E) barriers to the development of natural resources. 
A) public education. 
B) barriers to technological adoption. 
C) free trade. 
D) endogenous growth. 
E) barriers to the development of natural resources.

Question 6

Government policy can change the rate of economic growth by changing

Accepted Answer

A) the size of government. 
B) the fraction of time devoted to working. 
C) labour supply. 
D) the legal system. 
E) free trade arrangements. 
A) the size of government. 
B) the fraction of time devoted to working. 
C) labour supply. 
D) the legal system. 
E) free trade arrangements.

Question 7

In the equation describing the accumulation of human capital, $$H ^ { \prime } = b ( 1 - u ) H \text {, the parameter } b$$ determines

Accepted Answer

A) the growth rate of the labour force in equilibrium. 
B) physical capital accumulation. 
C) the efficiency of human capital. 
D) the efficiency of the educational sector. 
E) the level of human capital in equilibrium. 
A) the growth rate of the labour force in equilibrium. 
B) physical capital accumulation. 
C) the efficiency of human capital. 
D) the efficiency of the educational sector. 
E) the level of human capital in equilibrium.

Question 8

In the endogenous growth models of Lucas and Romer, workers divide their time between market work and

Accepted Answer

A) trying to invent new production processes. 
B) leisure. 
C) accumulating physical capital. 
D) accumulating human capital. 
E) work at home. 
A) trying to invent new production processes. 
B) leisure. 
C) accumulating physical capital. 
D) accumulating human capital. 
E) work at home.

Question 9

The Solow growth model predicts that aggregate output

Accepted Answer

A) will grow at the rate of the growth in income per worker in the long run. 
B) will be maximized in the long run. 
C) will grow at the rate of the population growth in the long run. 
D) will grow at the rate of the growth in capital per worker in the long run. 
E) will grow at the rate of the labour force growth in the long run. 
A) will grow at the rate of the growth in income per worker in the long run. 
B) will be maximized in the long run. 
C) will grow at the rate of the population growth in the long run. 
D) will grow at the rate of the growth in capital per worker in the long run. 
E) will grow at the rate of the labour force growth in the long run.

Question 10

In the endogenous growth model

Accepted Answer

A) growth depends on the government sector. 
B) growth depends on the efficiency of human capital accumulation and the time devoted to it. 
C) growth depends on international trade. 
D) countries with different initial human capital will converge in the steady state. 
E) growth ceases in the steady state. 
A) growth depends on the government sector. 
B) growth depends on the efficiency of human capital accumulation and the time devoted to it. 
C) growth depends on international trade. 
D) countries with different initial human capital will converge in the steady state. 
E) growth ceases in the steady state.

Question 11

In the endogenous growth model presented in the text

Accepted Answer

A) consumption grows faster than human capital. 
B) human capital grows faster than consumption. 
C) consumption and human capital grow at varying rates. 
D) both consumption and human capital grow at the same rate. 
E) neither consumption nor human capital grows in the steady-state. 
A) consumption grows faster than human capital. 
B) human capital grows faster than consumption. 
C) consumption and human capital grow at varying rates. 
D) both consumption and human capital grow at the same rate. 
E) neither consumption nor human capital grows in the steady-state.

Question 12

What are the major factors affecting standards of living and economic development across nations?

Accepted Answer

There are many factors that influence th

Question 13

Suppose a country is significantly richer than the others. According to the Solow growth model, what happens in the long run?

Accepted Answer

A) Nothing. 
B) The rich country grows the fastest. 
C) The other countries catch up to the rich one. 
D) The rich country becomes poorer than the other ones. 
E) Both grow at the same rate and the income differences persist. 
A) Nothing. 
B) The rich country grows the fastest. 
C) The other countries catch up to the rich one. 
D) The rich country becomes poorer than the other ones. 
E) Both grow at the same rate and the income differences persist.

Question 14

If the time allocated to human capital accumulation increases

Accepted Answer

A) output grows at a higher rate, but is lower initially. 
B) international trade declines. 
C) the government sector grows. 
D) output is higher forever. 
E) output is lower forever. 
A) output grows at a higher rate, but is lower initially. 
B) international trade declines. 
C) the government sector grows. 
D) output is higher forever. 
E) output is lower forever.

Question 15

In the endogenous growth model

Accepted Answer

A) the growth rate of capital is less than the growth rate of output. 
B) the growth rate of human capital is greater than the growth rate of output. 
C) the growth rate of human capital is equal to the growth rate of output. 
D) the growth rate of output is equal to the growth rate of human capital. 
E) the growth rate of output is greater than to the growth rate of human capital. 
A) the growth rate of capital is less than the growth rate of output. 
B) the growth rate of human capital is greater than the growth rate of output. 
C) the growth rate of human capital is equal to the growth rate of output. 
D) the growth rate of output is equal to the growth rate of human capital. 
E) the growth rate of output is greater than to the growth rate of human capital.

Question 16

Income per worker has been

Accepted Answer

A) converging in neither the poor nor the rich countries. 
B) converging in the poor countries but not converging in the rich countries. 
C) converging in the rich countries, but not converging in the poor countries. 
D) converging in both the rich countries and the poor countries. 
E) fluctuating significantly for both the rich and poor countries. 
A) converging in neither the poor nor the rich countries. 
B) converging in the poor countries but not converging in the rich countries. 
C) converging in the rich countries, but not converging in the poor countries. 
D) converging in both the rich countries and the poor countries. 
E) fluctuating significantly for both the rich and poor countries.

Question 17

In the endogenous growth model, government policy can affect

Accepted Answer

A) the budgetary deficit. 
B) exports. 
C) leisure. 
D) the growth rate of aggregate output and consumption. 
E) interest rates. 
A) the budgetary deficit. 
B) exports. 
C) leisure. 
D) the growth rate of aggregate output and consumption. 
E) interest rates.

Question 18

Paul Romer argues that a key feature of knowledge is

Accepted Answer

A) durability. 
B) physical capital. 
C) private ownership. 
D) divisibility. 
E) nonrivalry. 
A) durability. 
B) physical capital. 
C) private ownership. 
D) divisibility. 
E) nonrivalry.

Question 19

Which of the following is a way to obtain endogenous growth?

Accepted Answer

A) population growth 
B) inflation 
C) human capital accumulation 
D) physical capital accumulation 
E) reduce barriers to technology adoption 
A) population growth 
B) inflation 
C) human capital accumulation 
D) physical capital accumulation 
E) reduce barriers to technology adoption

Question 20

Decreasing the fraction of time devoted to working leads to

Accepted Answer

A) lower labour supply. 
B) higher consumption per worker. 
C) higher incomes per worker. 
D) increases in the fraction of time spent accumulating human capital. 
E) a cleaner environment. 
A) lower labour supply. 
B) higher consumption per worker. 
C) higher incomes per worker. 
D) increases in the fraction of time spent accumulating human capital. 
E) a cleaner environment.

According to the Solow model, differences in standards of living across countries is explained by

If a larger fraction of the population receives public education, and a smaller fraction receives private education, then

A key characteristic of the production function in the endogenous growth model presented in the text is that

The importance of barriers to the adoption of technologies is supported by research by

Barriers to Riches, by S. Parente and E. Prescott, emphasizes the importance of

Government policy can change the rate of economic growth by changing

In the equation describing the accumulation of human capital, $H ^ { \prime } = b ( 1 - u ) H \text {, the parameter } b$ determines

In the endogenous growth models of Lucas and Romer, workers divide their time between market work and

The Solow growth model predicts that aggregate output

In the endogenous growth model

In the endogenous growth model presented in the text

What are the major factors affecting standards of living and economic development across nations?

Suppose a country is significantly richer than the others. According to the Solow growth model, what happens in the long run?

If the time allocated to human capital accumulation increases

In the endogenous growth model

Income per worker has been

In the endogenous growth model, government policy can affect

Paul Romer argues that a key feature of knowledge is

Which of the following is a way to obtain endogenous growth?

Decreasing the fraction of time devoted to working leads to

Introduction

Measurement

Business Cycle Measurement

Consumer and Firm Behavior: the Workleisure Decision and Profit Maximization

A Closed-Economy One-Period Macroeconomic Model

Search and Unemployment

Economic Growth: Malthus and Solow

A Two-Period Model: the Consumptionsavings Decision and Credit Markets

Credit Market Imperfections: Credit Frictions, Financial Crises, and Social Security

A Real Intertemporal Model With Investment

Money, Banking, Prices, and Monetary Policy

Business Cycle Models With Flexible Prices and Wages

New Keynesian Economics: Sticky Prices

Inflation: Phillips Curves and Neo-Fisherism

International Trade in Goods and Assets

Money in the Open Economy

Money, Inflation, and Banking: a Deeper Look

Filters

Exam 8: Income Disparity Among Countries and Endogenous Growth

According to the Solow model, differences in standards of living across countries is explained by

If a larger fraction of the population receives public education, and a smaller fraction receives private education, then

A key characteristic of the production function in the endogenous growth model presented in the text is that

The importance of barriers to the adoption of technologies is supported by research by

Barriers to Riches, by S. Parente and E. Prescott, emphasizes the importance of

Government policy can change the rate of economic growth by changing

In the equation describing the accumulation of human capital, H′=b(1−u)H, the parameter bH ^ { \prime } = b ( 1 - u ) H \text {, the parameter } bH′=b(1−u)H, the parameter b determines

In the endogenous growth models of Lucas and Romer, workers divide their time between market work and

The Solow growth model predicts that aggregate output

In the endogenous growth model

In the endogenous growth model presented in the text

What are the major factors affecting standards of living and economic development across nations?

Suppose a country is significantly richer than the others. According to the Solow growth model, what happens in the long run?

If the time allocated to human capital accumulation increases

In the endogenous growth model

Income per worker has been

In the endogenous growth model, government policy can affect

Paul Romer argues that a key feature of knowledge is

Which of the following is a way to obtain endogenous growth?

Decreasing the fraction of time devoted to working leads to

Introduction

Measurement

Business Cycle Measurement

Consumer and Firm Behavior: the Workleisure Decision and Profit Maximization

A Closed-Economy One-Period Macroeconomic Model

Search and Unemployment

Economic Growth: Malthus and Solow

A Two-Period Model: the Consumptionsavings Decision and Credit Markets

Credit Market Imperfections: Credit Frictions, Financial Crises, and Social Security

A Real Intertemporal Model With Investment

Money, Banking, Prices, and Monetary Policy

Business Cycle Models With Flexible Prices and Wages

New Keynesian Economics: Sticky Prices

Inflation: Phillips Curves and Neo-Fisherism

International Trade in Goods and Assets

Money in the Open Economy

Money, Inflation, and Banking: a Deeper Look

Filters

In the equation describing the accumulation of human capital, $H ^ { \prime } = b ( 1 - u ) H \text {, the parameter } b$ determines