chapter_6_review-2

# B capital replaces land in the production function c

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Unformatted text preview: e is no investment or government spending. D) the model is static with only one period. E) population growth depends on income per worker. 29) 30) An increase in savings can be brought about A) through government policy. B) by increased consumption per worker. C) by increased total factor productivity. D) in the short run only. E) by increased labour supply. 30) 31) In Solow s model of economic growth, suppose that s represents the savings rate, z represents total factor productivity, k represents the level of capital per worker, and f(k) represents the per worker production function. Also suppose that n represents the population growth rate and d represents 31) the depreciation rate of capital. The equilibrium level of capital per worker, k , will satisfy the equation: s k. A) f(k ) = (n + d) B) szk = ( n + d)f(k ). C) szf(k ) = (n + d)k . D) f(k ) = (n + d)k . E) nf(k ) = sk . (s + d) 32) Recent evidence suggests that the level of output per worker is A) positively correlated with the growth rate in output per worker. B) negatively correlated with the rate of population growth. C) negatively correlated with the rate of population growth. D) not correlated with the growth rate in output per worker. E) positively correlated with the rate of population growth. 5 32) 33) In the steady state of Solow s exogenous growth model, an increase in the population growth rate A) decreases output per worker and increases capital per worker. B) decreases output per worker and the marginal product of labour. C) increases output per worker and increases capital per worker. D) increases output per worker and decreases capital per worker. E) decreases output per worker and decreases capital per worker. 33) 34) The Malthusian model emphasizes a fixed supply of which of the following factors of production? A) natural resources B) land C) labour D) energy E) capital 34) ^ ^ 35) For the production function, Y = zK0.36N0.64, if measured output is Y, measured capital input is K, ^ 35) and measured labor input is N, then the Solow residual would be equal to ^ 0.36 ^ K A) ^ 0.64 × Y. N ^ B) C) D) E) Y ^ 0.36 ^ 0.64 . K N ^ 0.64 ^ N ^ 0.36 × Y. K ^ 0.36 ^ K ^ 0.64 × zY. N ^ 0.36 ^ 0.64 K N . ^ Y 36) Growth in the Solow residual was fastest in the A) 1950s. B) 1960s. C) 1970s. 36) D) 1980s. E) 1990s. 37) In the steady state of Solow s exogenous growth model, an increase in the growth rate of labour force A) decreases output per worker and increases capital per worker. B) increases output per worker and decreases capital per worker. C) decreases output per worker and the marginal product of labour. D) increases output per worker and increases capital per worker. E) decreases output per worker and decreases capital per worker. 37) 38) The Solow residual attempts to measure the amount of output not explained by A) the amount of a nation s human capital. B) technological progress. C) economic projections. D) business cycles. E) the dir...
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