According to the Solow model, an increase to the savings rate will O increase income per worker in the steady-state, but will have no effect on long-run growth rate of income per worker. 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. increase income per worker in the steady-state and long-run growth rate of income per
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- What do the growth accounting studies conclude are the determinants of growth? Which is more important, the determinants or how they am combined?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-stateConsider the Solow Model with no population or technological growth. Suppose that two countriesare identical except that in Country A the depreciation rate is greater than the depreciation rate inCountry B.a. How do you compare the steady state level of capital per worker in these countries? Illustrategraphically. Explain the economic intuition for the di erences in capital per worker in steadystate.b. Which country a higher output per worker in steady state? What about investment per workerin steady state? Explain carefully.
- In the Solow economic model, id like to know the relationship between the rate of population growth and the steady state level of income. I know that when the rate of population growth grow, then the breakeven investment line goes up, which decreses investment and capital per worker, but what does it do to the income level and the steady state rate of growth?In the steady state of Solow's exogenous growth model, an increase in the savings rate .... O A. increases output per worker, reduces consumption per worker and decreases capital per worker. B. increases output per worker and increases capital per worker. C. decreases output per worker and decreases capital per worker. D. increases output per worker and decreases capital per worker. O E. decreases output per worker and increases capital per worker.Which impacts economic growth? O a decrease in the productivity of labor O an increase in the proportion of the population that is college educated O an increase in the average wage rate paid to workers O an increase in the standard of living
- 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)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.Many demographers predict that the UnitedStates will have zero population growth in thetwenty-first century, in contrast to average popu-lation growth of about 1 percent per year in thetwentieth century. Use the Solow model to fore-cast the effect of this slowdown in populationgrowth on the growth of total output and the growth of output per person. Consider theeffects both in the steady state and in the transi-tion between steady states.
- 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.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)Consider the Solow growth model without population growth and technological progress. When investment per worker is greater than the amount of capital per worker that depreciates, then: a. the economy will not be able to reach its steady-state level of capital. O b. the steady-state level of capital per worker is larger than the current level of capital per worker. the steady-state level of capital per worker is smaller than the current level of capital per worker. O d. the steady-state level of capital per worker equals the current level of capital per worker.