Exam 4: The Theory of Economic Growth

An economy with parameter values of population growth n=0.02, efficiency of labor growth g=0.02, depreciation rate =0.03, and a diminishing-returns-to-investment parameter =0.4 would, if off of its steady-state growth path, close a fraction equal to _______ of the gap between its current state and its steady-state each year.

If, in the Cobb-Douglas production, the value of E is $15000, is .3 and capital per worker is $250,000, then output per worker would be approximately

The production function tells us that there is a systematic relationship between _________ and the economy's _________.

If the parameter E of the Cobb-Douglas production function has a low value

If an economy is very unproductive

Capital intensity refers to

The balanced growth capital-output ratio depends on

If growth rate of the efficiency of labor increases, with the labor force growth rate, capital stock depreciation rate, and saving rate held constant,

An economy that is not on its steady-state growth path will close a fraction ____________ of the gap between its current state and its steady-state growth path in a year.

The capital-output ratio will ________ if the saving rate decreases and the rate of depreciation of the capital stock remains the same.

The biggest reason that Americans today are more productive and better off than their predecessors of a century or is that they have enjoyed an extraordinary increase in the

The capital-output ratio is said to be in equilibrium when it is equal to