# Quiz 4: Working With the Solow Growth Model

Business

Q 1Q 1

An increase in the depreciation rate affects the steady-state capital per worker the same way as an increase in the population growth rate.

Free

True False

True

Free

True False

False

Q 3Q 3

An increase in technology causes the real GDP per worker to increase during the transition to the steady-state.

Free

True False

True

Q 4Q 4

An increase in technology cause the growth in real output per worker to be higher in the long run or steady-state.

Free

True False

Q 5Q 5

The Solow model of growth says that poorer economies should over time converge towards richer ones in terms of real output put worker.

Free

True False

Q 6Q 6

In the revised version of the Solow growth model the optimal level of capital stock per worker depends on:
A)the saving rating.
C)population growth rate.
B)the depreciation rate.
D)all of the above.

Free

Multiple Choice

Q 7Q 7

In the revised version of the Solow growth model the optimal level of the capital stock per worker depends on:
A)monetary growth.
C)the saving rate.
B)government spending.
D)all of the above.

Free

Multiple Choice

Q 8Q 8

In the revised version of the Solow growth model the optimal level of the capital stock per worker depends on:
A)monetary growth.
C)appreciation in the stock market.
B)the depreciation rate.
D)all of the above.

Free

Multiple Choice

Q 9Q 9

In the revised version of the Solow growth model the optimal level of the capital stock per worker depends on:
A)the population growth rate.
C)inflation.
B)government spending.
D)all of the above.

Free

Multiple Choice

Q 10Q 10

In the Solow growth model as a growing economy transitions to the steady state:
A)the average product of capital falls.
C)the average product of labour falls.
B)output per worker is constant.
D)the growth rate of capital is equal to zero.

Free

Multiple Choice

Q 11Q 11

In the Solow growth model in the steady state the growth rate of capital per worker, k*, is:
A)rising.
C)fluctuating.
B)falling.
D)zero.

Free

Multiple Choice

Q 12Q 12

In the Solow growth model, if technology, A, improves, then in the steady state:
A)output per worker grows faster.
C)capital per worker grows faster.
B)output per worker grows at the same rate, zero.
D)all of the above.

Free

Multiple Choice

Q 13Q 13

In the Solow growth model, if the population growth rate, n, increases, then in the steady state:
A)output per worker grows slower.
C)capital per worker grows at the same rate, zero.
B)capital per worker grows slower.
D)all of the above.

Free

Multiple Choice

Q 14Q 14

In the Solow growth model, if the depreciation rate, , increases, then in the steady state:
A)output per worker grows at the same rate, zero.
C)capital per worker grows faster.
B)output per worker grows faster.
D)all of the above.

Free

Multiple Choice

Q 15Q 15

In the Solow growth model, if labour input, L(0), increases, then in the steady state:
A)output per worker grows faster.
C)capital per worker grows faster.
B)capital per worker grows at the same rate, zero.
D)all of the above.

Free

Multiple Choice

Q 16Q 16

In the Solow growth model in the steady state the growth rate of output per worker, y*, is:
A)rising.
C)constant at zero.
B)falling.
D)fluctuating.

Free

Multiple Choice

Q 17Q 17

If the saving rate increases in the Solow growth model, then during the transition to the steady state:
A)the growth rate of capital per worker will increase.
C)the growth rate of capital per worker is constant.
B)the growth rate of capital per worker will decrease.
D)the growth rate of capital per worker is zero.

Free

Multiple Choice

Q 18Q 18

If the saving rate increases in the Solow growth model, then in the steady state the growth rate of capital per worker is:
A)constant.
C)zero.
B)unchanged.
D)all of the above.

Free

Multiple Choice

Q 19Q 19

If the saving rate increases in the Solow growth model, then in the steady state the growth rate of capital per worker is:
A)higher.
C)lower.
B)unchanged.
D)rising.

Free

Multiple Choice

Q 20Q 20

If the saving rate increases in the Solow growth model, then in the steady state:
A)capital per worker and the growth of capital will be higher.
C)capital per worker will be higher but the growth rate of capital will be lower.
B)capital per worker will be higher but the growth rate of capital will remain the same at zero.
D)capital per worker will be lower but the growth rate of capital will be higher.

Free

Multiple Choice

Q 21Q 21

In the Solow growth model during the transition an increase in technology:
A)lowers the growth rate of capital per worker.
C)raises the growth rate of capital per worker.
B)does not change the growth rate of capital per worker.
D)causes the growth rate of capital to fall to zero per worker.

Free

Multiple Choice

Q 22Q 22

In the Solow growth model during the transition an increase in technology:
A)lowers the growth rate of output per worker.
C)raises the growth rate of output per worker.
B)does not change the growth rate of output per worker.
D)causes the growth rate of output per worker to fall to zero.

Free

Multiple Choice

Q 23Q 23

In the Solow growth model during the transition an increase in technology:
A)lowers the growth rate of capital and output per worker.
C)raises the growth rate of capital and output per worker.
B)raises the growth rate of capital per worker and lowers the growth rate of output per worker.
D)lowers the growth rate of capital per worker and raises the growth rate of output per worker.

Free

Multiple Choice

Q 24Q 24

In the Solow growth model in the short run, an increase in the labour input L(0):
A)increases the growth rate of real output per worker.
C)reduces the growth rate of capital per worker.
B)increases s•(y/k).
D)decreases s + n.

Free

Multiple Choice

Q 25Q 25

In the Solow growth model in the short run, an increase in the labour input L(0),
A)decrease the growth rate of real output per worker.
C)increase the growth rate of capital per worker.
B)increases s•(y/k).
D)decrease s + n.

Free

Multiple Choice

Q 26Q 26

In the Solow growth model in the long run or steady state, an increase in the labour input L(0) will,
A)increase the capital stock.
C)not affect real output per worker.
B)lead to a growth of the capital stock per worker of zero.
D)all of the above.

Free

Multiple Choice

Q 27Q 27

In the Solow growth model in the long run or steady state, an increase in the labour input L(0) will,
A)decrease the capital stock.
C)not change real output per worker.
B)lead to a positive growth of the capital stock per worker.
D)all of the above.

Free

Multiple Choice

Q 28Q 28

Figure 4.1
Determinants
of k/k
-In Figure 4.1 the distance between s•(y/k) and s + n is the growth of capital per worker:
A)in the transition.
C)in the steady state.
B)in the long-run.
D)none of the above.

Free

Multiple Choice

Q 29Q 29

Figure 4.1
Determinants
of k/k
-In Figure 4.1 if the saving rate increases, then
A)the curve s + n increases.
C)the curve s + n decreases.
B)the curve s + n becomes steeper.
D)the curve s + n becomes flatter.

Free

Multiple Choice

Q 30Q 30

Figure 4.1
Determinants
of k/k
-In Figure 4.1, if the saving rate increase, then:
A)s•(y/k) increases.
C)s•(y/k) decreases.
B)s•(y/k) gets steeper.
D)s•(y/k) becomes vertical.

Free

Multiple Choice

Q 31Q 31

Figure 4.1
Determinants
of k/k
-In Figure 4.1, if the saving rate increase, then:
A)s•(y/k) and s + n increase.
C)s•(y/k) and s + n decrease.
B)s•(y/k) increases while s + n decreases.
D)s•(y/k) decreases while s + n increase.

Free

Multiple Choice

Q 32Q 32

Figure 4.1
Determinants
of k/k
-In Figure 4.1, if the technology improves, then:
A)s•(y/k) increases.
C)s•(y/k) decreases.
B)s + n increases.
D)s + n decreases.

Free

Multiple Choice

Q 33Q 33

Figure 4.1
Determinants
of k/k
-In Figure 4.1, if the initial amount of labour increases, then:
A)s•(y/k) increases.
C)s + n increases.
B)K/L moves away from the optimum.
D)the growth rate of population increases.

Free

Multiple Choice

Q 34Q 34

Figure 4.1
Determinants
of k/k
-In Figure 4.1, if the initial amount of labour increases, then in the steady state:
A)the growth rate of capital per worker increases.
C)the growth rate of output per worker is the same.
B)the growth rate of output per worker rises.
D)the population growth rate rises.

Free

Multiple Choice

Q 35Q 35

Figure 4.1
Determinants
of k/k
-In Figure 4.1, if the initial amount of labour increases, then during the transition to the steady state:
A)the growth rate of capital per worker and output per worker increase.
C)the growth rate of capital per worker increases and output per worker decrease.
B)the growth rate of capital per worker and output per worker decrease.
D)the growth rate of capital per worker decreases and output per worker increases.

Free

Multiple Choice

Q 36Q 36

Figure 4.1
Determinants
of k/k
-In Figure 4.1, if the population growth rate increases, then:
A)s•(y/k) increases.
C)s + n increases.
B)K/L moves away from the optimum.
D)the initial amount of labour increases.

Free

Multiple Choice

Q 37Q 37

Figure 4.1
Determinants
of k/k
-In Figure 4.1, an increase in productivity:
A)raises the steady state growth rate of capital per worker.
C)lowers the steady state growth rate of output per worker
B)does not change steady state growth rates of output or capital per worker.
D)lowers the steady state level of capital.

Free

Multiple Choice

Q 38Q 38

Figure 4.1
Determinants
of k/k
-In Figure 4.1, an increase in the depreciation rate has the same effects as:
A)an increase in the savings rate.
C)an increase in the population growth rate.
B)an increase in the initial amount of labour.
D)all of the above.

Free

Multiple Choice

Q 39Q 39

Figure 4.1
Determinants
of k/k
-In Figure 4.1, an increase in technology:
A)increases s•(y/k)
C)increases s + n.
B)decreases s•(y/k)
D)decreases s + n.

Free

Multiple Choice

Q 40Q 40

Figure 4.1
Determinants
of k/k
-In Figure 4.1, an increase in technology:
A)increases k*.
C)decreases k*.
B)does not affect k*.
D)makes k* zero.

Free

Multiple Choice

Q 41Q 41

Figure 4.1
Determinants
of k/k
-In Figure 4.1, an increase in the population growth rate:
A)increases k*.
C)decreases k*.
B)does not affect k*.
D)makes k* zero.

Free

Multiple Choice

Q 42Q 42

Figure 4.1
Determinants
of k/k
-In Figure 4.1, an increase in the depreciation rate:
A)increases k*.
C)decreases k*.
B)does not affect k*.
D)makes k* zero.

Free

Multiple Choice

Q 43Q 43

Figure 4.1
Determinants
of k/k
-In Figure 4.1, if the technology improves, then:
A)the steady-state capital stock increases.
C)the steady-state growth in output per worker increases.
B)the steady-state growth in capital per worker increases.
D)the population growth rate increases.

Free

Multiple Choice

Q 44Q 44

Convergence of economies is the tendency according to the Solow growth model for:
A)richer countries to buy up all the capital in poorer countries.
C)poorer economies to grow faster in terms of real GDP per capita than richer countries.
B)richer countries to tend decline as pollution damage increases.
D)the tendency for richer economies to shrink to the size of poorer economies.

Free

Multiple Choice

Q 45Q 45

Since 1960 the data show a tendency of output per worker to converge:
A)in all countries in the world.
C)in OECD countries.
B)countries with different savings rates.
D)none of the above.

Free

Multiple Choice

Q 46Q 46

The data show a tendency of output per worker to converge:
A)among European countries from 1880 to 2011.
C)in OECD countries from 1960 to 2000.
B)countries with similar economies.
D)all of the above.

Free

Multiple Choice

Q 47Q 47

Convergence will not happen if economies around the world have:
A)different saving rates.
C)different population growth rates.
B)different technologies.
D)all of the above.

Free

Multiple Choice

Q 48Q 48

Convergence will not happen if economies around the world have:
A)different saving rates.
C)different levels out labour input.
B)different average products of capital in the transition.
D)all of the above.

Free

Multiple Choice

Q 49Q 49

Convergence will not happen if economies around the world have:
A)different capital labour ratios in during the transition.
C)different levels out labour input.
B)different population growth rates.
D)all of the above.

Free

Multiple Choice

Q 50Q 50

Convergence will not happen if economies around the world have:
A)different average products of capital during the transition.
C)different levels of technology.
B)different initial levels of labour input.
D)all of the above.

Free

Multiple Choice

Q 51Q 51

Convergence will not happen if economies around the world have:
A)different average products of capital during the transition.
C)different optimum levels of capital per worker, k*.
B)different initial levels of labour input.
D)all of the above.

Free

Multiple Choice

Q 52Q 52

Economies are said to have converged if they:
A)have the same growth rate in the transition.
C)have the same saving rate.
B)have the same capital per worker, k*, in the steady state.
D)all of the above.

Free

Multiple Choice

Q 53Q 53

When converging economies:
A)have the same growth rate of capital per worker.
C)have the same growth rate of output per worker.
B)the same steady state capital per worker, k*.
D)all of the above.

Free

Multiple Choice

Q 54Q 54

Convergence will not happen if economies around the world have:
A)different savings rates.
C)different optimum levels of capital per worker, k*.
B)different population growth rates.
D)all of the above.

Free

Multiple Choice

Q 55Q 55

Convergence will not happen if economies around the world have:
A)different capital per worker growth rates in the transition.
C)different initial starting points.
B)different initial levels of labour input, L(0).
D)none of the above.

Free

Multiple Choice

Q 56Q 56

What are the short and long run effects of an increase in the saving rate in the Solow growth model?

Free

Essay

Q 57Q 57

What are the long and short run effects of an increase in technology, A, in the Solow growth model?

Free

Essay

Q 58Q 58

What are the long run and short run effects to an increase in the labour input in the Solow growth model?

Free

Essay

Q 59Q 59

What are the long and short run effects of an increase in the population growth rate the Solow growth model?

Free

Essay

Q 60Q 60

Why does the Solow growth model show the economies of poor countries tend to converge over time toward richer ones in terms of per capita and real GDP per worker?

Free

Essay