6. Assume an endogenous growth model with labor augmenting technology and a production function of the form Y = F(K, EL), with E = 2(K/L). If the savings rate is s = 0.05 and there is neither population growth nor depreciation of capital, what is the growth rate of output? A) 0% B) 2.5% C) 5% 10% D) E) it cannot be determined

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Chapter1: Making Economics Decisions
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6. Assume an endogenous growth model with labor augmenting
technology and a production function of the form Y = F(K, EL), with E =
2(K/L). If the savings rate is s = 0.05 and there is neither population
growth nor depreciation of capital, what is the growth rate of output?
A) 0%
B) 2.5%
C) 5%
D) 10%
E) it cannot be determined
11. Growth accounting explains
A) how economic decisions control the accumulation of capital
B) how the current savings rate affects the stock of capital in the future
C) what part of growth in total output is due to growth in different
factors of production
D) all of the above
E) only A) and B)
12. If Y is output, K is capital, u is the fraction of the labor force in
universities, L is labor, and E is the stock of knowledge, and the
production Y = F(K,(1 – u) EL) exhibits constant returns to scale, then
output (Y) will double if:
A) Kis doubled.
B) K and u are doubled.
C) Land E are doubled.
D) Lis doubled.
E)
none of the above
Transcribed Image Text:there are 3 question explaination 6. Assume an endogenous growth model with labor augmenting technology and a production function of the form Y = F(K, EL), with E = 2(K/L). If the savings rate is s = 0.05 and there is neither population growth nor depreciation of capital, what is the growth rate of output? A) 0% B) 2.5% C) 5% D) 10% E) it cannot be determined 11. Growth accounting explains A) how economic decisions control the accumulation of capital B) how the current savings rate affects the stock of capital in the future C) what part of growth in total output is due to growth in different factors of production D) all of the above E) only A) and B) 12. If Y is output, K is capital, u is the fraction of the labor force in universities, L is labor, and E is the stock of knowledge, and the production Y = F(K,(1 – u) EL) exhibits constant returns to scale, then output (Y) will double if: A) Kis doubled. B) K and u are doubled. C) Land E are doubled. D) Lis doubled. E) none of the above
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