ECO 302 Week 4 Quiz – Strayer



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Chapter 4 and 5

Chapter 4

TRUE/FALSE

            1.         An increase in the depreciation rate affects the steady-state capital per worker the same way as an increase in the population growth rate.

                                   

            2.         If the saving rate increases, then the optimum level of capital per worker falls.

                                   

            3.         An increase in technology causes the optimum level of capital per worker to rise in the long run or steady state.

                                   

            4.         An increase in technology causes the real GDP per worker to increase during the transition to the steady-state.

                                   

            5.         An increase in technology cause the growth in real output per worker to be higher in the long run or steady-state.

                                   

            6.         An increase in the saving rate causes the growth in real output per worker to be lower in the long run or steady-state.

                                   

            7.         The Solow model of growth says that poorer economies should over time converge towards richer ones in terms of real output put worker.

                                   

            8.         In the long run or steady state of the Solow model, the growth rate of capital per worker is higher with a higher saving rate.

                                   

            9.         An increase in the population growth rate in the Solow model causes the growth in output per worker to be higher in the long run or steady-state.

                                   

            10.       An increase in the population growth rate in the Solow model causes output per worker to be lower in the long run or steady-state.

                                   

MULTIPLE CHOICE

            1.         In the revised version of the Solow growth model the optimal level of capital stock per worker depends on:
a.         the saving rating.         c.         population growth rate.
b.         the depreciation rate.  d.         all of the above.


                                   

            2.         In the revised version of the Solow growth model the optimal level of the capital stock per worker depends on:
a.         monetary growth.        c.         the saving rate.
b.         government spending.             d.         all of the above.


                                   

            3.         In the revised version of the Solow growth model the optimal level of the capital stock per worker depends on:
a.         monetary growth.        c.         appreciation in the stock market.
b.         the depreciation rate.              d.         all of the above.


                                   

            4.         In the revised version of the Solow growth model the optimal level of the capital stock per worker depends on:
a.         the population growth rate.     c.         inflation.
b.         government spending.             d.         all of the above.


                                   

            5.         In the Solow growth model as a growing economy transitions to the steady state:
a.         the average product of capital falls.    c.         the average product of labor falls.
b.         output per worker is constant.            d.         the growth rate of capital is equal to zero.


                                   

            6.         In the Solow growth model in the steady state the growth rate of capital per worker, k*, is:
a.         rising.  c.         fluctuating.
b.         falling.             d.         zero.


                                   

            7.         In the Solow growth model, if technology, A, improves, then in the steady state:
a.         output per worker grows faster.          c.         capital per worker grows faster.
b.         output per worker grows at the same rate, zero.         d.         all of the above.


                                   

            8.         In the Solow growth model, if the population growth rate, n, increases, then in the steady state:
a.         output per worker grows slower.        c.         capital per worker grows at the same rate, zero.
b.         capital per worker grows slower.        d.         all of the above.


                                   

            9.         In the Solow growth model, if the depreciation rate,  , increases, then in the steady state:
a.         output per worker grows at the same rate, zero.         c.         capital per worker grows faster.
b.         output per worker grows faster.          d.         all of the above.


                                   

            10.       In the Solow growth model, if labor input, L(0), increases, then in the steady state:
a.         output per worker grows faster.          c.         capital per worker grows faster.
b.         capital per worker grows at the same rate, zero.         d.         all of the above.


                                   

            11.       In the Solow growth model in the steady state the growth rate of output per worker, y*, is:
a.         rising.  c.         constant at zero.
b.         falling.             d.         fluctuating.


                                   

            12.       If the saving rate increases in the Solow growth model, then during the transition to the steady state:
a.         the growth rate of capital per worker will increase.    c.         the growth rate of capital per worker is constant.
b.         the growth rate of capital per worker will decrease.   d.         the growth rate of capital per worker is zero.


                                   

            13.       If the saving rate increases in the Solow growth model, then in the steady state the growth rate of capital per worker is:
a.         constant.          c.         zero.
b.         unchanged.      d.         all of the above.


                                   

            14.       If the saving rate increases in the Solow growth model, then in the steady state the growth rate of capital per worker is:
a.         higher. c.         lower.
b.         unchanged.      d.         rising.


                                   

            15.       If the level of technology  increases in the Solow growth model, then in the steady state, the growth rate of capital per worker is:
a.         higher. c.         lower.
b.         unchanged.      d.         rising.


                                   

            16.       If the saving rate increases in the Solow growth model, then in the steady state:
a.         capital per worker and the growth of capital will be higher. c.         capital per worker will be higher but the growth rate of capital will be lower.
b.         capital per worker will be higher but the growth rate of capital will remain the same at zero.          d.            capital per worker will be lower but the growth rate of capital will be higher.


                                   

            17.       If the level of technology increases in the Solow growth model, then in the steady state
a.         capital per worker and the growth of capital will be higher. c.         capital per worker will be higher but the growth rate of capital will be lower.
b.         capital per worker will be higher but the growth rate of capital will remain the same at zero.          d.            capital per worker will be lower but the growth rate of capital will be higher.


                                   

            18.       If the level of technology increases in the Solow growth model, then in the steady state
a.         capital per worker will be higher.        c.         the growth rate of capital will be lower.
b.         saving per worker will be higher.        d.         capital per worker will be the same.


                                   

            19.       If the level of technology increases in the Solow growth model, then in the steady state
a.         capital per worker will be higher.        c.         the growth rate of capital will be lower.
b.         output per worker will be higher.        d.         both (a) and (b).


                                   

            20.       If the saving rate increases in the Solow growth model, then in the steady state
a.         capital per worker will be higher.        c.         the growth rate of ca

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