Chapter 8: Economic growth I: Capital Accumulation and Population Growth Question: In the Solow growth model, the steady state level of output per worker would be greater if the .... rate rose or the ...... rate declined. .... . Lütfen birini seçin: O a. depreciation / population growth O D population growth / saving O C. saving: denreciation

Chapter 8: Economic growth I: Capital Accumulation and Population Growth Question: In the Solow growth model, the steady state level of output per worker would be greater if the .... rate rose or the ...... rate declined. .... . Lütfen birini seçin: O a. depreciation / population growth O D population growth / saving O C. saving: denreciation

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter20: Economic Growth In The Global Economy

Section: Chapter Questions

Problem 5P

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Suppose the government decides to reduce the Department of Science and Technology's budget for research. Assume this cancelled investment in research could have paid off in terms of useful innovations that increase labor efficiency. Which of the following statements is true under the Solow growth model with population growth and technological progress? In the steady state, the growth rate of the country's output per capita is expected to decrease. O b. In the steady state, the growth rate of the country's output per capita is expected to increase. O c. All the other statements are false. d. In the steady state, the growth rate of the country's total output is expected to increase.
In the Solow growth model without population growth and technological progress, how can the steady state of an economy be described? (i) Total capital stock and total output are growing steadily over time. (ii) The change in capital stock per worker is zero. (iii) The level of investment per capita is equal to the depreciation of capital per person. O a. (i), (ii), and (iii) O b. Only (ii) and (iii) O c. Only (i) and (ii) O d. Only (i) and (iii)
In the Solow growth model, which of the following is/are the effect/s of an increase in the rate of technological progress? (i) higher capital-output ratio (ii) faster growth in output per worker (iii) faster growth in output O a. (i), (ii), and (iii) O b. Only (i) and (ii) O c. Only (1) and (iii) O d. Only (ii) and (iii)
Suppose Country A has twice the population growth but half the technological growth of Country B. County B's population growth is equal to its technological growth. Assuming that the two countries are similar in all other variables, then according to the Solow growth model: O a. The growth rate of total output is the same for Country A and Country B. b. The growth rate of total output for Country A is lower than Country B. Cannot tell. Need more information. O c. O d. The growth rate of total output for Country A is higher than Country B.
In the Solow growth model without population growth and technological progress, consumption per worker will be maximized in the steady state when: (1) Output per worker is maximized. (ii) Investment per worker is maximized. (iii) The marginal product of capital equals the depreciation rate. O a. (i), (ii), and (ii) O b. Only (iii) O c. Only (ii) Od. Only (1)
Suppose that population growth increases. The Solow growth model with population growth and depreciation (but without technological progress) predicts that this will tend to deteriorate people's welfare because of: (i) lower total output (ii) lower output per worker (iii) lower consumption per worker O a. (i), (ii), and (iii) O b. Only (i) and (iii) O c. Only (ii) and (iii) O d. Only (i) and (ii)
According to the Solow model, an increase to the savings rate will increase income per worker in the steady-state, but will have no effect on long-run growth rate of income per worker. O increase consumption per worker if and only if the new steady-state capital per worker is greater than the golden rule level of capital per worker. O increase the long-run growth rate of income per worker if and only if the new steady-state capital per worker is greater than the golden rule level of capital per worker. O increase income per worker in the steady-state and long-run growth rate of income per worker.
11. Alter the Solow growth model so that the pro- duction technology is given by Y= zK, where Y is output, K is capital, and z is total factor pro- ductivity. Thus, output is produced only with саpital. (a) Show that it is possible for income per person to grow indefinitely. (b) Also show that an increase in the savings rate increases the growth rate in per capita income.
In the Solow growth model without population growth and technological progress, which of the following statements is/are always true in the steady state when the saving rate increases? (i) Output per worker increases. (ii) Consumption per worker increases. (iii) Capital per worker increases. O a. (i), (ii), and (iii) are always true. O b. O c. O d. None of the statements is always true. Only (i) and (ii) are always true. Only (i) and (iii) are always true.
5. Consider the Solow growth model. The production function is: Y = Kª(AN)!-«, the is the capital depreciation rate is & per year, the population and technology savıng rate grow at annual rates of n and g respectively. Calculate K/N, K/(AN), Y /N and Y/(AN) in the steady state. Does the change in s affect the growth rate? Explain. S, 6. Suppose that the model of the economy is given by Y = C +I+G + X 99 sunny hp 10 f8 144 14 is & 6. 7. 8. 24
In the Solow growth model, if the economy's actual capital stock per worker is greater than the steady-state capital stock per worker, growth from convergence O A. detracts from the overall growth of the economy until the steady state is attained. O B. complicates the growth process and creates uncertainty regarding the overall growth of the economy. O C. adds to the overall growth of the economy until the steady state is attained. O D. neither adds to nor detracts from the overall growth of the economy.
3 pts in the Solow model, the economy reaches a steady-state because as capital per worker increases O savings per worker is constant, while the population growth rate is contare and the depreciation rate of capital decen, ing that the economy w gro endogenously while the population growth rate and the depreciation rate of capital are comitant implying that the economy will converge to a sady O marginal savings per worker diminishes, while the population growth rate and the depreciation rate of capital are constant implying that the economy will gro endogenously Osaving perv state. O marginal savings per worker diminishes, while the population growth rate and the depreciation rate of capital are constant, implying that the economy will converge to a steady-state