Question 1

One plausible explanation of the U.S. productivity slowdown starting in 1973 is that it was a result of the increase in the relative price of energy. This explanation would require that,in light of higher energy costs,the

Accepted Answer

A)  capital stock is overestimated. 
B)  capital stock is underestimated. 
C)  labor force is overestimated. 
D)  labor force is underestimated.

Question 2

Growth accounting,popularized by Robert Solow,attempts to attribute a change in aggregate output

Accepted Answer

A)  to its most important single cause. 
B)  separately between changes in government policy and changes in total factor productivity. 
C)  separately between changes in total factor productivity and changes in the supplies of factors of production. 
D)  separately between changes in the supplies of factors of production and changes in government policy.

Question 3

The period from 2000 to 2010

Accepted Answer

A)  was a period of high productivity growth. 
B)  was a period with negative productivity growth, because of the Great Recession. 
C)  was a period of zero productivity growth. 
D)  was a period of low productivity growth, almost as bad as the period 1970-1980.

Question 4

In the Malthusian model,population growth is endogenous because

Accepted Answer

A)  the birth rate is endogenous. 
B)  the death rate is endogenous. 
C)  the birth and death rates are endogenous. 
D)  neither is endogenous.

Question 5

Which of the following increases total factor productivity?

Accepted Answer

A)  investment in machinery 
B)  a harsh winter 
C)  better access to credit 
D)  new production procedures

Question 6

In the Solow growth model,the law of motion of capital takes into account

Accepted Answer

A)  the residential nature of houses. 
B)  the mobility of capital. 
C)  the depreciation of old capital. 
D)  the cost of shipping and installing capital.

Question 7

We can express the per-worker production function as a function of only per-worker capital thanks to

Accepted Answer

A)  the decreasing marginal return of capital. 
B)  the decreasing marginal return of labor. 
C)  the constant returns to scale. 
D)  the impatience of households.

Question 8

The Solow residual attempts to measure the amount of output not explained by

Accepted Answer

A)  technological progress. 
B)  the direct contribution of labor and capital. 
C)  economic projections. 
D)  the amount of a nation's human capital.

Question 9

In a Malthusian world,what would improve the standard of living temporarily?

Accepted Answer

A)  a war 
B)  a new virus 
C)  birth control 
D)  democracy

Question 10

A steady state is

Accepted Answer

A)  a temporary equilibrium. 
B)  a Pareto Optimum. 
C)  a long-run equilibrium. 
D)  an economy with ongoing fluctuations.

Question 11

All of the following increase total factor productivity except

Accepted Answer

A)  new inventions. 
B)  more capital. 
C)  new management techniques. 
D)  favorable changes in government regulations.

Question 12

Malthus was too pessimistic because he did not foresee the effects of

Accepted Answer

A)  ever increasing amounts of land for cultivation. 
B)  increases in the capital stock and the effects of such increases on production. 
C)  improved nutrition and health care. 
D)  improved family planning practices.

Question 13

The Malthusian model predicts that

Accepted Answer

A)  population will keep increasing. 
B)  the standard of living will keep increasing. 
C)  health improvements increase the standard of living. 
D)  population control improves the standard of living.

Question 14

In the steady state of Solow's exogenous growth model,an increase in total factor productivity

Accepted Answer

A)  increases output per worker and increases capital per worker. 
B)  increases output per worker and decreases capital per worker. 
C)  decreases output per worker and increases capital per worker. 
D)  decreases output per worker and decreases capital per worker.

Question 15

For the production function,Y = zK0.36N0.64,if measured output is Y ,measured capital inputK is ,and measured labor input is N ,then the Solow residual would be equal to

Accepted Answer

A)  
B)  
C)  
D)

Question 16

In an exogenous growth model,growth is caused by

Accepted Answer

A)  capital accumulation. 
B)  government policies. 
C)  human capital accumulation. 
D)  forces that are not explained by the model itself.

Question 17

We can use a per-worker production function in the Malthusian model because

Accepted Answer

A)  there is a representative worker. 
B)  firms are competitive. 
C)  there is a steady state. 
D)  the production function has constant returns to scale.

Question 18

In a Malthusian world,what would improve the standard of living permanently?

Accepted Answer

A)  a war 
B)  a new medical drug 
C)  birth control 
D)  democracy

Question 19

In Solow's model of economic growth,suppose that s represents the savings rate,z represents total factor productivity,k represents the level of capital per worker,and f(k)represents the per-worker production function. Also suppose that n represents the population growth rate and d represents the depreciation rate of capital. The equilibrium level of capital per worker,k*,will satisfy the equation

Accepted Answer

A)  szf(k*) = (n + d)k*. 
B)  szk* = (n + d)f(k*). 
C)  nf(k*) =  . 
D)  f(k*) =  k*.

Question 20

In the Golden Rule steady state,the marginal product of capital is equal to the

Accepted Answer

A)  savings rate plus the population growth rate. 
B)  population growth rate plus the depreciation rate. 
C)  depreciation rate plus the savings rate. 
D)  savings rate divided by the marginal product of labor.

Exam 7: Economic Growth: Malthus and Solow