Question 1

In theory,differences in output across economies and over time might be the result of differences in either capital input,labor input,or productivity.The evidence points clearly to productivity as a more likely and powerful source of growth differences.Which aspects of the Solow growth model help to explain why the inputs of capital and labor contribute little to growth of output,relative to productivity?

Accepted Answer

The answer of In theory,differences in output across economies and...

Question 2

If the contribution from capital and labor growth in a given economy equals 4.0 percent and output growth equals 6.4 percent over that same period of time,then productivity growth must equal ________.
A)25.6 percent
B)10.4 percent
C)2.4 percent
D)1.6 percent

Accepted Answer

Productivity growth is the difference between output growth and the combined contribution of capital and labor growth. 
Productivity growth = Output growth - (Capital growth + Labor growth) 
Substituting the given values, 
Productivity growth = 6.4% - 4.0% 
Productivity growth = 2.4%

Question 3

Productivity growth can be measured ________.
A)by dividing output by Kt0.3 Lt0.7
B)by adding the contributions from capital growth and labor growth
C)by subtracting the contributions from capital growth and labor growth from the growth of output
D)by dividing the growth of output by the contributions from capital growth and labor growth

Accepted Answer

Productivity growth is typically measured by subtracting the contributions of capital and labor growth from the overall growth of output, which isolates the portion of growth not explained by these inputs, often referred to as Total Factor Productivity (TFP).

Question 4

Figure 6.1 
-According to Figure 6.1,the average annual rate of growth of the U.S.economy in the period 1948-73 equalled ________.
A)1.8 percent
B)4.0 percent
C)39 percent
D)697 percent

Accepted Answer

Looking at the graph, the growth rate around 4 percent seems to be the most accurate. The other options (C and D) are extremely high and unrealistic growth rates. Option A is too low compared to what the graph shows.

Question 5

Economic growth ________.
A)is driven by different elements in different economies
B)is driven primarily by digital technology
C)is driven primarily by labor growth
D)cannot be explained using economic models

Accepted Answer

Economic growth is influenced by various factors such as investment in physical and human capital, innovation, technological advancements, trade, and government policies. The relative importance of these determinants can vary across different economies.

Question 6

Productivity is ________.
A)determined by central bank policy
B)the combined effect of monetary and fiscal policy
C)the residual component of the production function
D)driven by changes in the rate of growth of output

Accepted Answer

Productivity is the residual component of the production function, which means it is determined by factors such as technology, human capital, and efficiency of production processes. It is not directly influenced by central bank policy or fiscal and monetary policy. While changes in the rate of growth of output can affect productivity, it is not the sole determinant.

Question 7

National output is a function of ________.
A)capital and saving
B)technology,employment and demand
C)labor and depreciation
D)labor,technology and capital

Accepted Answer

National output is a result of a combination of labor, technology, and capital. Labor contributes to the output through work and effort, technology refers to the techniques and processes used in production, while capital refers to the physical assets used in production, such as machinery and equipment. Therefore, D (labor, technology, and capital) is the best choice.

Question 8

Figure 6.1 
-According to Figure 6.1,the average annual rate of growth of the U.S.economy in the period 1996-2011 equalled ________.
A)0.3 percent
B)2.2 percent
C)30 percent
D)300 percent

Accepted Answer

The line graph in Figure 6.1 shows the average annual rate of growth for the U.S. economy from 1996 to 2011. The y-axis of the graph represents the average annual rate of growth, while the x-axis represents the year. Based on the graph, the average annual rate of growth in the period 1996-2011 is approximately 2.2 percent, which is represented by the slope of the line connecting the points for 1996 and 2011. Therefore, the best choice is B, 2.2 percent.

Question 9

A major contribution of the Solow model is its ________.
A)insight into what distinguishes rich economies from poor economies
B)explanation of why productivity grows over time
C)demonstration that the key to sustained growth is a high level of saving
D)encouragement of policies to limit population growth

Accepted Answer

The Solow model analyzes what distinguishes rich economies from poor economies, with a focus on factors such as physical capital, human capital, technological progress, and savings. It does not directly explain why productivity grows over time or suggest that limiting population growth is a necessary policy. While the model does suggest that savings are important for long-term growth, it does not argue that a high level of savings alone is sufficient for sustained growth.

Question 10

Figure 6.1 
-According to Figure 6.1,the period from 1974 to 1995 is particularly remarkable for the slow growth of ________.
A)output per worker
B)labor input
C)output
D)capital input

Accepted Answer

According to Figure 6.1, the output per worker remained relatively stagnant during the period from 1974 to 1995, indicating slow growth.

Question 11

The slowdown in U.S.economic growth in the period 1974-95 was primarily caused by ________.
A)falling labor growth
B)falling capital growth
C)falling productivity growth
D)none of the above

Accepted Answer

The slowdown in economic growth during that period was primarily caused by a decline in productivity growth, which slowed from an average annual rate of 2.8% in the period 1948-73 to 1.5% in the period 1974-95.

Question 12

The highest rate of U.S.growth was recorded in which of the following periods?
A)1948-73
B)1967-83
C)1974-95
D)1996-2008

Accepted Answer

The highest rate of U.S. growth was recorded in the period from 1948 to 1973, a time often referred to as the "Golden Age" of economic expansion in the post-World War II era. This period was characterized by rapid industrial growth, significant increases in productivity and living standards, and relatively low unemployment rates.

Question 13

The growth accounting equation suggests that the growth rate of output is equal to the growth rate of ________.
A)total factor productivity plus the contributions of both capital and labor
B)total factor productivity minus the rate of depreciation
C)capital and labor
D)the overall population

Accepted Answer

The growth accounting equation is Y = A*K^α*L^(1-α), where Y is output, A is total factor productivity, K is capital and L is labor. Taking the natural logarithm of both sides and differentiating with respect to time gives the growth rate of output as g(Y) = g(A) + α*g(K) + (1-α)*g(L). This equation shows that the growth rate of output is equal to the growth rate of total factor productivity plus the contributions of both capital and labor.

Question 14

Figure 6.1 
-According to Figure 6.1,the period from 1996 to 2011 is particularly remarkable for the rapid growth of ________.
A)productivity
B)labor input
C)output
D)capital input

Accepted Answer

The answer of Figure 6.1 
-According to Figure 6.1,the period...

Question 15

Capital and labor are distinct from productivity in that ________.
A)productivity is independent of technology changes
B)productivity can only increase over time
C)productivity is subject to diminishing returns
D)capital and labor are subject to diminishing marginal returns

Accepted Answer

Capital and labor are subject to diminishing marginal returns, which means that as more capital and labor are added to production, the marginal increase in output decreases. Productivity, on the other hand, can be increased through technological advances, better management practices, and improved worker skills. Therefore, it is distinct from capital and labor.

Question 16

Figure 6.1 
-According to Figure 6.1,in postwar U.S history ________.
A)productivity growth was always exceeded by labor growth
B)labor growth has always exceeded capital growth
C)productivity growth has always exceeded capital growth
D)output growth has always exceeded productivity growth

Accepted Answer

Output growth exceeding productivity growth implies that the increase in total production is greater than the improvements in the efficiency of production. This can occur when there is an increase in inputs (like labor and capital) alongside productivity improvements, leading to overall higher output growth.

Question 17

Which of the following is the most difficult to measure? Changes in ________.
A)the size of the labor force
B)population
C)the quantity of labor
D)productivity

Accepted Answer

Productivity is the most difficult to measure as it requires measuring the output produced with the inputs used, and the inputs can include a complex mix of labor, capital, and technology. It is also difficult to separate the effect of each input on the output.

Question 18

Across national economies which of the following is the most important source of variation in growth rates?
A)labor growth
B)capital growth
C)productivity growth
D)government regulation

Accepted Answer

Productivity growth is the most important source of variation in growth rates across national economies. It is the key determinant of long-term economic growth and enables countries to produce more output with the same resources or the same output with fewer resources. Labor and capital growth are important factors, but they are limited by diminishing marginal returns. Government regulation can both stimulate or inhibit economic growth, but it is not the most important source of variation in growth rates across national economies.

Question 19

If productivity growth equals 3.0 percent,the contribution from capital growth 1.2 percent and the contribution from labor growth 2.0 percent,then output growth must equal ________.
A)2.2 percent
B)4.2 percent
C)6.2 percent
D)7.2 percent

Accepted Answer

Output growth is the sum of productivity growth, capital growth, and labor growth. Therefore, output growth equals 3.0% + 1.2% + 2.0% = 6.2%.

Question 20

Figure 6.1 
-According to Figure 6.1,the period from 1996 to 2011 is particularly remarkable for the slow growth of ________.
A)productivity
B)labor input
C)output
D)capital input

Accepted Answer

The answer of Figure 6.1 
-According to Figure 6.1,the period...

Quiz 6: The Sources of Growth and the Solow Model

If the contribution from capital and labor growth in a given economy equals 4.0 percent and output growth equals 6.4 percent over that same period of time,then productivity growth must equal ________.

Productivity growth can be measured ________.

Figure 6.1 -According to Figure 6.1,the average annual rate of growth of the U.S.economy in the period 1948-73 equalled ________.

Economic growth ________.

Productivity is ________.

National output is a function of ________.

Figure 6.1 -According to Figure 6.1,the average annual rate of growth of the U.S.economy in the period 1996-2011 equalled ________.

A major contribution of the Solow model is its ________.

Figure 6.1 -According to Figure 6.1,the period from 1974 to 1995 is particularly remarkable for the slow growth of ________.

The slowdown in U.S.economic growth in the period 1974-95 was primarily caused by ________.

The highest rate of U.S.growth was recorded in which of the following periods?

The growth accounting equation suggests that the growth rate of output is equal to the growth rate of ________.

Figure 6.1 -According to Figure 6.1,the period from 1996 to 2011 is particularly remarkable for the rapid growth of ________.

Capital and labor are distinct from productivity in that ________.

Figure 6.1 -According to Figure 6.1,in postwar U.S history ________.

Which of the following is the most difficult to measure? Changes in ________.

Across national economies which of the following is the most important source of variation in growth rates?

If productivity growth equals 3.0 percent,the contribution from capital growth 1.2 percent and the contribution from labor growth 2.0 percent,then output growth must equal ________.

Figure 6.1 -According to Figure 6.1,the period from 1996 to 2011 is particularly remarkable for the slow growth of ________.