41. According to the neoclassical growth model, a one-time technological advance willA) shift the investment requirement line up n B) increase the long-term growth rate of outputC) have no effect on the steady-state capital-labor ratio n D) lead to a decrease in the rate of depreciation n E) none of the aboveAns: EDifficulty: Medium42. The steady state is defined as a long-run equilibrium at which capital, labor, and output all grow at the same rate. To be in a steady state in a neoclassical model, which of the following equations has to be satisfied? Difficulty: Medium43. In the neoclassical growth model, the steady-state capital-labor ratio is determined by the equation Difficulty: Medium44. According to neoclassical growth theory which of the following does NOT affect a nation's long-term growth rate?38

Difficulty: Medium45. For a neoclassical growth model, which of the following statements is FALSE?A) an increase in the savings rate will increase the steady-state growth rate of aggregate output NB) an increase in population growth will increase the steady-state growth rate of aggregate output YC) an increase in population growth will reduce the steady-state level of income per capitaD)if poor countries save at the same rate as rich countries and have access to the same technology, they will eventually catch upE) long-run growth results from improvements in technology Ans: ADifficulty: Medium **ONE TIME tech advance wont affect ss output growth rate46. In a neoclassical growth model in which a one-time advance in technology occurs we could expectDifficulty: Easy47. When current saving and investment are just enough to equip new entrants into the labor force with the same amount of capital that the average person already in the work force uses, then39

Difficulty: Medium48. In a neoclassical growth model, steady-state consumption is maximized when the marginal increase in the capital-labor ratio (k) produces just enough extra output per capita (y) that the marginal product of k is equal to Difficulty: Medium49. The golden-rule capital stock (k**) ensuring that steady-state consumption is maximized is at the point on the production function f(k) where the marginal product of capital (k) is equal to A) n + dB) n - dC) s(n + d)D) sa/(n + d)E) sa/(n - d)Ans: ADifficulty: Medium50. The golden-rule capital stock (k**) corresponds to 40

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