Question 1

If the capital-labor ratio is above the Golden Rule capital-labor ratio,then in the steady state,

Accepted Answer

A) capital per worker is above its maximum. 
B) output per worker is less than it would be at the Golden Rule capital-labor ratio. 
C) investment per worker exceeds output per worker. 
D) consumption per worker is not at its maximum. 
A) capital per worker is above its maximum. 
B) output per worker is less than it would be at the Golden Rule capital-labor ratio. 
C) investment per worker exceeds output per worker. 
D) consumption per worker is not at its maximum.

Question 2

Suppose the current level of output is 5000.If the elasticities of output with respect to capital and labor are 0.3 and 0.7,respectively,a 10% increase in capital combined with a 5% increase in labor and a 5% increase in productivity would increase the current level of output to

Accepted Answer

A) 5015. 
B) 5325. 
C) 5575. 
D) 6000. 
A) 5015. 
B) 5325. 
C) 5575. 
D) 6000.

Question 3

The Golden Rule capital-labor ratio is the level of the capital-labor ratio that,in the steady state,

Accepted Answer

A) maximizes output per worker. 
B) maximizes investment per worker. 
C) maximizes consumption per worker. 
D) maximizes capital per worker. 
A) maximizes output per worker. 
B) maximizes investment per worker. 
C) maximizes consumption per worker. 
D) maximizes capital per worker.

Question 4

In the Solow model,if f(k)= 2k0.5,s = 0.25,n = 0.1,and d = 0.4,what is the value of k at equilibrium?

Accepted Answer

A) 1 
B) 2 
C) 3 
D) 4 
A) 1 
B) 2 
C) 3 
D) 4

Question 5

In the Solow model,if k = 8,y = 20,and s = 0.2,what is c?

Accepted Answer

A) 24 
B) 20 
C) 16 
D) 12 
A) 24 
B) 20 
C) 16 
D) 12

Question 6

Which of the following changes would lead,according to the Solow model,to a higher level of long-run output per worker?

Accepted Answer

A) A lower level of capital per worker 
B) An increase in the saving rate 
C) A rise in the rate of population growth 
D) A decrease in productivity 
A) A lower level of capital per worker 
B) An increase in the saving rate 
C) A rise in the rate of population growth 
D) A decrease in productivity

Question 7

Over the past year,output grew 4%,capital grew 2%,and labor grew 1%.If the elasticities of output with respect to capital and labor are 0.3 and 0.7,respectively,how much did productivity grow?

Accepted Answer

A) 2)0% 
B) 2)7% 
C) 3)0% 
D) 3)3% 
A) 2)0% 
B) 2)7% 
C) 3)0% 
D) 3)3%

Question 8

Over the past year,productivity grew 1%,capital grew 2%,and labor grew 2%.If the elasticities of output with respect to capital and labor are 0.3 and 0.7,respectively,how much did output grow?

Accepted Answer

A) 1% 
B) 2% 
C) 3% 
D) 4% 
A) 1% 
B) 2% 
C) 3% 
D) 4%

Question 9

Greenwood and Yorukoglu view the post-1973 productivity slowdown as resulting from

Accepted Answer

A) the information technology revolution. 
B) high oil prices. 
C) measurement errors. 
D) technological depletion. 
A) the information technology revolution. 
B) high oil prices. 
C) measurement errors. 
D) technological depletion.

Question 10

A productivity improvement will cause

Accepted Answer

A) a rightward movement along the saving-per-worker curve and an increase in the capital-labor ratio. 
B) an upward shift in the saving-per-worker curve and an increase in the capital-labor ratio. 
C) a downward shift in the saving-per-worker curve and a decrease in the capital-labor ratio. 
D) a leftward movement along the saving-per-worker curve and a decrease in the capital-labor ratio. 
A) a rightward movement along the saving-per-worker curve and an increase in the capital-labor ratio. 
B) an upward shift in the saving-per-worker curve and an increase in the capital-labor ratio. 
C) a downward shift in the saving-per-worker curve and a decrease in the capital-labor ratio. 
D) a leftward movement along the saving-per-worker curve and a decrease in the capital-labor ratio.

Question 11

The bowed shape of the per-worker production function is caused by

Accepted Answer

A) wealth effects that reduce labor supply. 
B) diminishing marginal productivity of capital. 
C) increasing marginal productivity of labor. 
D) increasing marginal productivity of capital. 
A) wealth effects that reduce labor supply. 
B) diminishing marginal productivity of capital. 
C) increasing marginal productivity of labor. 
D) increasing marginal productivity of capital.

Question 12

All of the following are explanations of the post-1973 productivity slowdown EXCEPT

Accepted Answer

A) problems in measuring productivity. 
B) changes in the legal and human environment. 
C) higher oil prices. 
D) greater competition from foreign imports. 
A) problems in measuring productivity. 
B) changes in the legal and human environment. 
C) higher oil prices. 
D) greater competition from foreign imports.

Question 13

How would each of the following changes affect the steady-state values of the capital-labor ratio,output per worker,and consumption per worker?
(a)A change in the composition of the capital stock raises the depreciation rate.
(b)A change in social mores lowers the population growth rate.
(c)Government tax policies change to encourage a higher saving rate.
(d)A supply shock reduces productivity sharply.

Accepted Answer

(a)The rise in d reduces the capital-lab

Question 14

Why do some people think that the productivity slowdown since 1973 is just a return to normalcy after fast productivity growth during the previous 25 years?

Accepted Answer

A) Productivity growth of the previous 25 years was abnormally low. 
B) The Great Depression and World War II had prevented technological opportunities from being exploited. 
C) The United States is the only country to face the slowdown,due to poor regulatory decisions. 
D) The United States has allowed countries like Japan to steal its technological breakthroughs. 
A) Productivity growth of the previous 25 years was abnormally low. 
B) The Great Depression and World War II had prevented technological opportunities from being exploited. 
C) The United States is the only country to face the slowdown,due to poor regulatory decisions. 
D) The United States has allowed countries like Japan to steal its technological breakthroughs.

Question 15

Over the past year,productivity grew 1%,capital grew 0%,and labor grew 5%.If the elasticities of output with respect to capital and labor are 0.4 and 0.6,respectively,how much did output grow?

Accepted Answer

A) 1% 
B) 2% 
C) 3% 
D) 4% 
A) 1% 
B) 2% 
C) 3% 
D) 4%

Question 16

The level of the capital-labor ratio that maximizes consumption per worker in the steady state is known as the

Accepted Answer

A) Solow residual capital-labor ratio. 
B) Golden Rule capital-labor ratio. 
C) q theory capital-labor ratio. 
D) dynamically efficient capital-labor ratio. 
A) Solow residual capital-labor ratio. 
B) Golden Rule capital-labor ratio. 
C) q theory capital-labor ratio. 
D) dynamically efficient capital-labor ratio.

Question 17

In the Solow model,if f(k)= 8k0.5,s = 0.2,n = 0.3,and d = 0.1,what is the value of k at equilibrium?

Accepted Answer

A) 1 
B) 4 
C) 9 
D) 16 
A) 1 
B) 4 
C) 9 
D) 16

Question 18

What types of government policies can increase long-run living standards?

Accepted Answer

If,for some reason,the national saving r

Question 19

Endogenous growth theory attempts to

Accepted Answer

A) replace the Solow model with a model in which money growth plays a key role. 
B) explain how societies can more easily reach the "Golden Rule." 
C) show how population growth reduces capital and output. 
D) explain why productivity changes. 
A) replace the Solow model with a model in which money growth plays a key role. 
B) explain how societies can more easily reach the "Golden Rule." 
C) show how population growth reduces capital and output. 
D) explain why productivity changes.

Question 20

Steady-state investment per worker is positively related to the capital-labor ratio because the higher the capital-labor ratio

Accepted Answer

A) the lower the capital depreciation rate. 
B) the greater the amount of resources available for capital investment. 
C) the more investment per worker is required to replace depreciating capital. 
D) the less the economy needs to equip new workers with the same high level of capital. 
A) the lower the capital depreciation rate. 
B) the greater the amount of resources available for capital investment. 
C) the more investment per worker is required to replace depreciating capital. 
D) the less the economy needs to equip new workers with the same high level of capital.

If the capital-labor ratio is above the Golden Rule capital-labor ratio,then in the steady state,

Suppose the current level of output is 5000.If the elasticities of output with respect to capital and labor are 0.3 and 0.7,respectively,a 10% increase in capital combined with a 5% increase in labor and a 5% increase in productivity would increase the current level of output to

The Golden Rule capital-labor ratio is the level of the capital-labor ratio that,in the steady state,

In the Solow model,if f(k)= 2k0.5,s = 0.25,n = 0.1,and d = 0.4,what is the value of k at equilibrium?

In the Solow model,if k = 8,y = 20,and s = 0.2,what is c?

Which of the following changes would lead,according to the Solow model,to a higher level of long-run output per worker?

Over the past year,output grew 4%,capital grew 2%,and labor grew 1%.If the elasticities of output with respect to capital and labor are 0.3 and 0.7,respectively,how much did productivity grow?

Over the past year,productivity grew 1%,capital grew 2%,and labor grew 2%.If the elasticities of output with respect to capital and labor are 0.3 and 0.7,respectively,how much did output grow?

Greenwood and Yorukoglu view the post-1973 productivity slowdown as resulting from

A productivity improvement will cause

The bowed shape of the per-worker production function is caused by

All of the following are explanations of the post-1973 productivity slowdown EXCEPT

Why do some people think that the productivity slowdown since 1973 is just a return to normalcy after fast productivity growth during the previous 25 years?

Over the past year,productivity grew 1%,capital grew 0%,and labor grew 5%.If the elasticities of output with respect to capital and labor are 0.4 and 0.6,respectively,how much did output grow?

The level of the capital-labor ratio that maximizes consumption per worker in the steady state is known as the

In the Solow model,if f(k)= 8k0.5,s = 0.2,n = 0.3,and d = 0.1,what is the value of k at equilibrium?

What types of government policies can increase long-run living standards?

Endogenous growth theory attempts to

Steady-state investment per worker is positively related to the capital-labor ratio because the higher the capital-labor ratio

Introduction to Macroeconomics

The Measurement and Structure of the National Economy

Productivity, Output, and Employment

Consumption, Saving, and Investment

Saving and Investment in the Open Economy

The Asset Market, Money, and Prices

Business Cycles

The IS-LM/AD-AS Model

Classical Business Cycle Analysis

Keynesianism: The Macroeconomics of Wage and Price Rigidity

Unemployment and Inflation

Exchange Rates,Business Cycles,and Macroeconomic Policy in the Open Economy

Monetary Policy and the Federal Reserve System

Government Spending and Its Financing

Filters

Exam 6: Long-Run Economic Growth

If the capital-labor ratio is above the Golden Rule capital-labor ratio,then in the steady state,

Suppose the current level of output is 5000.If the elasticities of output with respect to capital and labor are 0.3 and 0.7,respectively,a 10% increase in capital combined with a 5% increase in labor and a 5% increase in productivity would increase the current level of output to

The Golden Rule capital-labor ratio is the level of the capital-labor ratio that,in the steady state,

In the Solow model,if f(k)= 2k0.5,s = 0.25,n = 0.1,and d = 0.4,what is the value of k at equilibrium?

In the Solow model,if k = 8,y = 20,and s = 0.2,what is c?

Which of the following changes would lead,according to the Solow model,to a higher level of long-run output per worker?

Over the past year,output grew 4%,capital grew 2%,and labor grew 1%.If the elasticities of output with respect to capital and labor are 0.3 and 0.7,respectively,how much did productivity grow?

Over the past year,productivity grew 1%,capital grew 2%,and labor grew 2%.If the elasticities of output with respect to capital and labor are 0.3 and 0.7,respectively,how much did output grow?

Greenwood and Yorukoglu view the post-1973 productivity slowdown as resulting from

A productivity improvement will cause

The bowed shape of the per-worker production function is caused by

All of the following are explanations of the post-1973 productivity slowdown EXCEPT

Why do some people think that the productivity slowdown since 1973 is just a return to normalcy after fast productivity growth during the previous 25 years?

Over the past year,productivity grew 1%,capital grew 0%,and labor grew 5%.If the elasticities of output with respect to capital and labor are 0.4 and 0.6,respectively,how much did output grow?

The level of the capital-labor ratio that maximizes consumption per worker in the steady state is known as the

In the Solow model,if f(k)= 8k0.5,s = 0.2,n = 0.3,and d = 0.1,what is the value of k at equilibrium?

What types of government policies can increase long-run living standards?

Endogenous growth theory attempts to

Steady-state investment per worker is positively related to the capital-labor ratio because the higher the capital-labor ratio

Introduction to Macroeconomics

The Measurement and Structure of the National Economy

Productivity, Output, and Employment

Consumption, Saving, and Investment

Saving and Investment in the Open Economy

The Asset Market, Money, and Prices

Business Cycles

The IS-LM/AD-AS Model

Classical Business Cycle Analysis

Keynesianism: The Macroeconomics of Wage and Price Rigidity

Unemployment and Inflation

Exchange Rates,Business Cycles,and Macroeconomic Policy in the Open Economy

Monetary Policy and the Federal Reserve System

Government Spending and Its Financing

Filters