6. The principle of transition dynamics can be summarized as: a. the further below its steady state an economy is, the faster the economy will grow. b. the closer to its steady state an economy is, the faster the economy will grow. c. the further below its steady state an economy is, the slower the economy will grow. d. regardless of how close to its steady state an economy is, the economy grows at the same rate. e. if the economy is very close to the steady state, it stops growing. 7. For which of the following does the Solow model NOT provide adequate explanations? a. why saving rates differ across countries b. the cause of productivity differences across countries c. why population growth rates differ across countries d. what causes long-term economic growth e. All of these answers are correct. 8. A nonrival good is one that: a. cannot be consumed by more that one person at a time. b. can be consumed by more than one person at a time. c. can be consumed by more than one person at a time but is congested. d. cannot be consumed by more than two people at a time. e. None of these answers is correct. 9. In the Romer model each individual produces: a. Capital and consumption goods only. b. Either consumption goods or ideas. Both consumption goods and ideas. 0. In the AK model, there exists: d. Consumption goods, capital goods, and ideas. e. Ideas only. a unique positive steady state independent of the investment rate. b. a unique steady state such that the capital stock increases with the investment rate c. a unique steady state such that the capital stock decreases with the investment rate d. A balanced growth path such that the rate of growth of the capital stock increases with the investment rate e. A balanced growth path such that the rate of growth of the capital stock decreases with the investment rate.
6. The principle of transition dynamics can be summarized as: a. the further below its steady state an economy is, the faster the economy will grow. b. the closer to its steady state an economy is, the faster the economy will grow. c. the further below its steady state an economy is, the slower the economy will grow. d. regardless of how close to its steady state an economy is, the economy grows at the same rate. e. if the economy is very close to the steady state, it stops growing. 7. For which of the following does the Solow model NOT provide adequate explanations? a. why saving rates differ across countries b. the cause of productivity differences across countries c. why population growth rates differ across countries d. what causes long-term economic growth e. All of these answers are correct. 8. A nonrival good is one that: a. cannot be consumed by more that one person at a time. b. can be consumed by more than one person at a time. c. can be consumed by more than one person at a time but is congested. d. cannot be consumed by more than two people at a time. e. None of these answers is correct. 9. In the Romer model each individual produces: a. Capital and consumption goods only. b. Either consumption goods or ideas. Both consumption goods and ideas. 0. In the AK model, there exists: d. Consumption goods, capital goods, and ideas. e. Ideas only. a unique positive steady state independent of the investment rate. b. a unique steady state such that the capital stock increases with the investment rate c. a unique steady state such that the capital stock decreases with the investment rate d. A balanced growth path such that the rate of growth of the capital stock increases with the investment rate e. A balanced growth path such that the rate of growth of the capital stock decreases with the investment rate.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Please help me answer 26-30
Transcribed Image Text:### Economic Theory and Models: Multiple Choice Questions
**26. The principle of transition dynamics can be summarized as:**
a. The further below its steady state an economy is, the faster the economy will grow.
b. The closer to its steady state an economy is, the faster the economy will grow.
c. The further below its steady state an economy is, the slower the economy will grow.
d. Regardless of how close to its steady state an economy is, the economy grows at the same rate.
e. If the economy is very close to the steady state, it stops growing.
**27. For which of the following does the Solow model NOT provide adequate explanations?**
a. Why saving rates differ across countries
b. The cause of productivity differences across countries
c. Why population growth rates differ across countries
d. What causes long-term economic growth
e. All of these answers are correct.
**28. A nonrival good is one that:**
a. Cannot be consumed by more than one person at a time.
b. Can be consumed by more than one person at a time.
c. Can be consumed by more than one person at a time but is congested.
d. Cannot be consumed by more than two people at a time.
e. None of these answers is correct.
**29. In the Romer model each individual produces:**
a. Capital and consumption goods only.
b. Either consumption goods or ideas.
c. Both consumption goods and ideas.
d. Consumption goods, capital goods, and ideas.
e. Ideas only.
**30. In the AK model, there exists:**
a. A unique positive steady state independent of the investment rate.
b. A unique steady state such that the capital stock increases with the investment rate
c. A unique steady state such that the capital stock decreases with the investment rate
d. A balanced growth path such that the rate of growth of the capital stock increases with the investment rate
e. A balanced growth path such that the rate of growth of the capital stock decreases with the investment rate
This educational material helps in understanding various economic models and their implications on growth, transition dynamics, and resource consumption.
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