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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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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:
A)
more in Highland.
B)
more in Lowland.
C)
by the same amount in Highland and Lowland.
D)
in Highland, but not in Lowland.
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.
A)
saving rate; production function
B)
depreciation rate; population growth rate
C)
production function; saving rate
D)
population growth rate; saving rate
4. In the Solow growth model, the steady-state occurs when:
A)
capital per worker is constant.
B)
the saving rate equals the depreciation rate.
C)
output per worker equals consumption per worker.
D)
consumption per worker is maximized.
5. The formula for the steady-state ratio of capital to labor (
k
*), with no population growth
or technological change, is
s
:
A)
divided by the depreciation rate.
B)
multiplied by the depreciation rate.
C)
divided by the product of
f
(
k
*) and the depreciation rate.
D)

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