Exam 8: Growth,capital Accumulation

Conditional convergence implies that there is _____ relationship between real GDP per capita and subsequent growth.

The level of the capital stock determines the level of output but not its growth rate,at least not in the very long run.

The Solow model is based on:

Most new idea creation today depends on government sponsorship.

If investment equals depreciation,then the capital stock:

-Figure: Increased Production In the accompanying graph,which of the following events could cause the upward shift of the production function?

Member nations of the Organisation for Economic Co-operation and Development (OECD)with a lower GDP per capita in 1960 experienced what sort of growth during the subsequent 40 years?

The concept of diminishing returns explains why China is growing so much faster than the United States.

The Solow model implies that countries farther away from their steady states will grow faster than countries closer to their steady states.

Among poor countries,economic growth comes primarily from new ideas,new technologies,or new methods of management.

If investment is less than depreciation,then the capital stock:

If investment is greater than depreciation,an economy will be below its steady state.

Provided they have the same steady state,the tendency for poorer countries to grow faster than richer countries and thus to converge in income is called:

Imagine an economy with production function Y = F(K)= and 400 units of capital.If the fraction of output invested in new capital is  = 0.2 and the depreciation rate is  = .05,how much total capital will be available in the next period?

Better ideas increase output directly because of higher productivity and indirectly because of capital accumulation.

An increase in the investment rate lowers the steady-state output.

Growth consists of two types: catching-up growth and cutting-edge growth.

Better ideas cause the:

Imagine an economy with production function Y = F(K)= and 400 units of capital.If the fraction of output invested in new capital is  = 0.2 and the depreciation rate is  = .05,what is the steady-state amount of capital?

To become rich,a poor country must invent new ideas.