Assignment_2

# Assignment_2 - ECON 410.502 Macroeconomic Theory Spring...

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Page 1 ECON 410.502 Macroeconomic Theory Spring 2010 Instructor: Guangyi Ma Assignment #2 Notice : (1) There are 25 multiple-choice problems and 2 analytic (short-answer) problems. This assignment is due on February 19, 2010 , class time. Please submit before the class starts. (2) For those who need more exercises, a set of extra problems will be posted on my webpage as well as on the e-learning page. These problems are not homework and will not be graded. The aim of these problems is to help you study and understand the class materials. (3) I will give solutions of the assignment and the “extra-problem” set after the due date. Name: ____________________

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Page 2 Problem 1~25: Multiple choice problems Please choose your answer and circle the corresponding capital letter (A, B, C, D) 1. The Solow growth model describes: A) how output is determined at a point in time. B) how output is determined with fixed amounts of capital and labor. C) how saving, population growth, and technological change affect output over time. D) the static allocation, production, and distribution of the economy's output. 2. Two economies are identical except that the level of capital per worker is higher in Highland than in Lowland. The production functions in both economies exhibit diminishing marginal product of capital. An extra unit of capital per worker increases output per worker: 3. In the Solow growth model of Chapter 7, for any given capital stock, the ______ determines how much output the economy produces, and the ______ determines the allocation of output between consumption and investment. 4. In the Solow growth model, the steady-state occurs when:
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