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= k1/2, 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
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