Page 1
ECO 3202.U07 Applied Macroeconomics - Practice Test #3
1. If capital lasts an average of 25 years, the depreciation rate is ______ percent per year.
A) 25
B) 5
C) 4
D) 2.5
2. The Golden Rule level of the steady-state capital stock:
3. If the per-worker production function is given by
y
=
k
1/2
, the saving ratio is 0.3, and the
depreciation rate is 0.1, then the steady-state ratio of output per worker (
y
) is:
4. In an economy with no population growth and no technological change, steady-state
consumption is at its greatest possible level when the marginal product of:
5. In the Solow model, it is assumed that a(n) ______ fraction of capital wears out as the
capital-labor ratio increases.
A) smaller
B) larger
C) constant
D) increasing

This
** preview**
has intentionally

**sections.**

*blurred***to view the full version.**

*Sign up*