QUESTION 1: Condition convergence, consumption, economic neutrality, theory of l
ID: 1100391 • Letter: Q
Question
QUESTION 1:
Condition convergence, consumption, economic neutrality, theory of liquidity of liquidity preference, index of stock market prices, consumption, miracle of Japanese and German growth, real interest rate, business cycle peak, savings rates, business cycle trough, money hypothesis, expansionary monetary policy, contractionary monetary policy, expansionary fiscal policy, contractionary fiscal policy, money model, output, output per worker, investment, spending hypothesis, IS-LM model, unplanned inventories, average workweek of production workers in manufacturing, average initial weekly claims of unemployment insurance, classical dichotomy.
QUESTION 2:
Consider an economy with the following cobb-douglas production function:
Y=F(K,L)=K^0.5L^0.5
Where k represent capital stock and l represent the population
QUESTION 3
According to the Solow growth model, if population growth is approximately 1% per year, the capital share of income is approximately 30%, depreciation is approximately 12% annually, and real GDP growth is approximately 4 percent annually;
Estimate the growth in technological progress.
What is the rate of growth of output?
At the golden rule saving rate, estimate the ratio of capital stock to output
QUESTION 4:
1.The golden Rule level of capital accumulation is the steady state with the highest level of
a. Output per worker.
b. Capital per worker
c. Savings per worker
d. Consumption per worker.
2. When f(k) is drawn on a graph with increases in k noted along the horizontal axis, the
a.Graph is a straight line.
b.Slope of the line eventually gets flatter and flatter.
c.Slope of the line eventually becomes negative.
d.Slope of the line eventually becomes steeper and steeper.
3.International data suggest that economies of countries with different steady states will converge to:
A. The same steady state.
B. Their own steady state.
C. The golden rule steady state.
D.steady states below the golden rule level.
4. In the solow growth model of an economy with population growth but no technological progress, if in the steady state the marginal product of capital equals 0.10, the depreciation rate equals 0.05, and the rate of population growth equals 0.03, then the capital per worker ratio ________the golden rule level.
a. is above
b. is below
c. is equal to
d. moves to
5. According to the solow model, persistently rising living standards can only be explained by
a. population growth
b. capital accumulation
c. saving rates.
d. technological progress.
6. Assume two economies are identical in every way except that one has higher population growth rate. According the solow growth model, in the steady state the country with the higher population growth rate will have _____ level of total output and _____ rate of growth of output per worker as/than the country with the lower population growth rate.
a. higher the same
b. higher a higher
c. lower the same
d. lower a lower
Explanation / Answer
QUESTION 1:
1)expansionary fiscal policy
2)economic neutrality
3)Condition convergence
4)index of stock market pricesconsumption
5)investment
6)theory of liquidity of liquidity preference,
7)consumption
8)money model
9)average initial weekly claims of unemployment insurance, classical dichotomy
10)contractionary monetary policy
11)real interest rate
12)unplanned inventories
13)contractionary fiscal policy
,14)miracle of Japanese and German growth
15)investment
QUESTION 4
1)a. Output per worker.
2)d.Slope of the line eventually becomes steeper and steeper.
3)C. The golden rule steady state.
4)b. is below
5)d. technological progress.
6)b. higher a higher