Exam 8: Growth,capital Accumulation

Capital is output that is consumed.

Capital accumulation alone can explain sustained economic growth over long periods of time in many countries.

In the Solow model production function,Y = F(A,K,eL),eL stands for:

In recent years,real GDP in China has grown:

Spillovers cause the social benefits of research and development to be greater than the private benefits.

Both institutions and property rights are becoming less favorable to entrepreneurship throughout the world.

Which is NOT a key institution for economic growth?

The nonrivalry of ideas means that different people cannot use the same idea simultaneously.

As more countries gain wealth,private firms will increase R&D in anticipation of a larger market.

Catching-up growth is growth due to:

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

The growth that results from better ideas or technological knowledge is:

Diminishing returns to capital means that twice the amount of capital will lead to twice the amount of output.

Among countries with similar steady-state levels of output,the tendency for poorer countries to grow faster than richer countries is called:

An increase in investment results in a higher level of steady-state output.

Once an economy reaches its steady state,it will continue to grow indefinitely.

The Solow model can be used to gain insight about the difference between catching-up growth and cutting-edge growth.

Cutting-edge growth occurs primarily through capital accumulation and the adoption of simple ideas that already exist.

The high growth experienced by China in recent years is due primarily to better institutions and increases in its capital stock.

In the Solow model,an increase in the investment rate will _____ the amount of capital needed to achieve a steady state.